BANK OF GHANA (BOG) CONFIRMS, FOREIGN INVESTORS GOOD FOR GHANA’S ECONOMY AND BANKING SECTOR

BOG stated that: “Local businesses, worst loan defaulters in 2017” in a report of the Bank of Ghana.

Local private businesses were the worst culprits in repaying loans taken from commercial banks for 2017. Local businesses constituted 80.6% defaulted loans in the private sector for last year. Foreign owned companies defaulted an estimated 7.9% of loan default attributable to the private sector. This is among the key findings of the Banking sector report for January this year.

The report catalogued operations in the banking industry as at December 2017. Between December 2016 and the same period last year, the total loans that banks offered to their customers increased from 35.4 to 37.66 billion Cedis.

The Bank of Ghana’s report also put the banking sector’s non-performing loans (NPLs) at 8.58 billion Cedis as at the end of last year compared to the 6.14 billion Cedis recorded in the preceding year.

Even though loan disbursements to both indigenous and foreign private sector businesses went up for the period, the local private businesses defaulted most in terms of repaying the loans.

Of the 94% loan default attributable to the private sector, indigenous private enterprises accounted for as much as 80.6% of total NPLs in December 2017 compared with a share of 78.9% in 2016.

Their foreign counterparts on the other hand, managed to bring their percentage of loan default down to 7.9% from 13.2% in the preceding year. Meanwhile the public sector’s contribution to the industry’s NPLs increased from 3.2% in December 2016 to 5.7% in December 2017.

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