Banks in the country last year wrote-off some Ghs 2.1 billion as bad debts.
This is according to the income statement of all 23 banks in the country made available by the Bank of Ghana (BoG).
The loans written-off for 2020 represents an increase of Ghs 400 million when compared to that written-off for 2019.
In 2019, bad loans amounted to Ghs 1.7 billion.
According to the Central Bank, loans written-off as bad debts could have been much worse had it not undertaken the financial sector reforms which commenced in August 2017.
The increase in bad loans of banks is mainly attributed to the adverse impacts of Covid-19 on the balance sheet of banks.
This is due to the fact that banks during last year gave reliefs in the form of loan restructuring and repayment suspension to cushion clients severely impacted by the pandemic which in turn moderated the impact the pandemic could have had on asset quality of banks.
Non-Performing Loans (NPL) for the period under review, increased slightly by 0.5 percent to 14.8 percent. Increase in NPLs came from the construction and manufacturing sectors respectively.
