Secured Loans in Ghana Reach GHS 10.8 Billion in Q2 2024, Marking 83.1% Growth YoY
In the second quarter of 2024, the value of secured loans granted by banks and Specialized Deposit-Taking Institutions (SDIs) in Ghana soared to GH¢10.8 billion, representing an 83.1% surge compared to the GH¢5.9 billion recorded in the corresponding period of 2023.
This significant growth underscores the increasing appetite for credit within the financial sector, driven largely by banks.
Banks Lead the Charge
Banks dominated the secured lending landscape, accounting for GH¢9.1 billion of the total, reflecting an 85.7% increase from GH¢4.9 billion in Q2 2023.
This substantial rise highlights the pivotal role banks play in the financial system, particularly in their ability to extend credit to both corporate and retail clients.
The Collateral Registry, which tracks secured loans, underscores this trend, noting that banks continue to be the primary drivers of credit expansion in the economy.
Performance of SDIs
Specialized Deposit-Taking Institutions (SDIs), which include Savings and Loans Companies (S&Ls), Rural and Community Banks (RCBs), and Microfinance Institutions, also demonstrated strong performance.
The total secured loans by SDIs reached GH¢1.7 billion in Q2 2024, up 75.1% from GH¢971.1 million in the same quarter of 2023. This growth, while robust, was slightly outpaced by the expansion seen in the banking sector.
Shifts in Market Share
In terms of market share, banks continued to command the largest portion, with 83.8% of the total value of secured loans in Q2 2024, up marginally from 83.7% in the same period the previous year.
Despite this dominance, the market share of Savings and Loans Companies declined slightly to 9.5%, down from 9.8% in Q2 2023, reflecting a tightening competitive environment.
Rural and Community Banks (RCBs) saw their share increase to 5.2% in Q2 2024 from 4.4% a year earlier, indicating a growing presence in the secured lending market.
Conversely, Microfinance Institutions experienced a marginal decline, with their share slipping to 1.0% from 1.1% year-on-year. The share of Micro Credit Companies also decreased marginally from 0.3% in Q2 2023, further highlighting the concentration of lending within larger, more established institutions.
Outlook
The data from the Collateral Registry highlights a sector in robust health, with secured lending growing at a pace that suggests confidence in the economy’s resilience and recovery.
As banks continue to dominate, the overall lending landscape remains competitive, with SDIs playing a crucial albeit smaller role in driving credit accessibility across different segments of the market.
