BoG to crack down loan defaulters with tough new sanctions

The Bank of Ghana (BoG) has unveiled a stringent new directive aimed at curbing the rising tide of non-performing loans (NPLs) and restoring stability to the country's financial sector.

Under the new measures, individuals identified as willful loan defaulters by regulated financial institutions (RFIs) will be blacklisted from accessing credit for up to five years. Their names will also be reported to the Financial Intelligence Centre for further scrutiny.

The directive, announced this week, forms part of a broader regulatory push to bring down NPL ratios to 10% or lower by December 2026. Institutions that fail to meet this target will face regulatory sanctions, including restrictions on dividend payouts, limits on loan book expansion, and other operational constraints.

The central bank is also requiring financial institutions—including banks, specialised deposit-taking institutions (SDIs), and non-bank financial institutions (NBFIs)—to write off all bad loans that have been fully provisioned. Enhanced credit risk management structures must also be adopted, including independent credit reviews, prompt recovery actions, and improved accuracy in credit reporting.

To increase transparency and public accountability, RFIs are now required to publish the names of wilful defaulters in at least two national newspapers and on their official websites.

Further, any director or shareholder connected to non-performing insider loans could face disqualification from holding office and may be forced to divest their interests in the affected institution.

According to the BoG, these reforms are in line with global standards and are critical to safeguarding Ghana’s financial system while promoting a stronger culture of credit responsibility.