Governor Asiama Urges Banks to Strengthen Risk Controls Amid Rising Credit Expansion
Governor of the Bank of Ghana, Dr Johnson Pandit Asiama, says private sector credit growth is beginning to strengthen following recent policy adjustments aimed at supporting credit expansion across the economy.
Speaking to business journalists at the 127th Monetary Policy Rate briefing, Dr Asiama explained that the Committee’s decision to ease the policy rate was informed by an assessment of risks to the outlook and the need to stimulate lending.
“Credit expansion — that’s exactly what the Committee has done. By assessing the risk in the outlook and adjusting the policy rate, that goes to support credit expansion. Banks will have no choice but to rebalance their portfolios, and we already see that trend creeping in,” he said.
According to him, data available to the Central Bank indicate that private sector credit growth has started picking up, with expectations of further improvement in the coming months.
However, Dr Asiama cautioned that the gains could be undermined if banks fail to strengthen their risk management practices.
“My only concern is that banks need to work on their risk management framework. Otherwise, the problem we had in the banking sector recently, which led to the cleanup, could re-emerge and that’s something we don’t want,” he warned.
He added that the Bank continues to advise lenders to rigorously assess their credit portfolios and ensure robust risk controls. “Even as banks review their credit portfolio, they should look at the risk management system by dotting the i’s and crossing the t’s. That’s the only way we can sustain growth in private sector credit,” he added.
Lending Rates Continue Downward Trend
Average lending rates have already fallen by more than seven percentage points since the start of 2025.
Data from the Bank of Ghana’s November 2025 Summary of Economic and Financial Data show that the average cost of borrowing declined to 22.22% in October 2025, down from 30.07% in January 2025.
The decline, however, was not linear. Rates inched up to 30.12% in February, before easing to 29.18% in March, 27.40% in April, and 26.90% in May. A marginal increase to 27.00% was recorded in June, after which lending rates resumed their downward trajectory.
The Ghana Reference Rate (GRR) has also continued to moderate, falling to 17.86% in October from 29.72% in January 2025, supported by improved liquidity conditions and falling money market rates.
The Central Bank expects the ongoing policy easing cycle, combined with declining yields on government securities, to further drive credit growth and lower lending costs.
