Individual Borrowers Dominate Secured Loans as Foreign-Owned Banks Maintain Market Lead
Individual borrowers became the largest recipients of secured loans in Ghana during the third quarter of 2024, accounting for 35.6% of the total value, according to the Bank of Ghana’s Q3 2024 Collateral Registry Brief.
This marks a sharp increase from the 19.6% recorded in the same period last year and reflects growing credit accessibility for individuals.
Private enterprises, predominantly SMEs, constituted the second-largest group, with their share slightly declining to 25.1% from 25.4% in Q3 2023.
Loans to large enterprises contracted significantly, with their share falling to 26.8% from 49.1% a year earlier, while microbusinesses saw an increase to 2.4%, up from 1.4%.
Other borrower categories accounted for 10.1%, more than doubling from 4.4% in Q3 2023.
Foreign Banks Sustain Lead
Foreign-owned banks maintained their dominant position in the secured loans market, accounting for 54.5% of total lending in Q3 2024, a marginal decrease from 54.8% in the previous year.
Domestically-owned banks, meanwhile, expanded their share slightly to 45.5% from 45.2%, underscoring their growing role in the sector.
Despite their dominance, the total value of loans issued by banks declined. Banks granted GH¢3.5 billion in secured loans, an 18.7% drop from the GH¢4.3 billion recorded in Q3 2023.
In contrast, Specialised Deposit-Taking Institutions (SDIs) recorded a significant 75% increase in loan issuance, rising to GH¢2.1 billion from GH¢1.2 billion in the prior year.
Broadening Access
The overall value of secured loans reached GH¢5.6 billion in Q3 2024, up 2.8% year-on-year. The increased share of loans to individuals and microbusinesses highlights a shift in the lending landscape, with financial institutions broadening access to smaller borrowers.
However, the declining share of loans to large enterprises may suggest a more cautious stance from lenders amid an evolving economic environment.
The data signals a diversification of credit allocation, potentially supporting economic resilience as financial institutions adjust their lending strategies.
