Improved debt collection reduces banks’ NPLs by 300 million cedis – BoG report

The Non Performing Loans (NPLs) of banks have dropped by 4.2 percent between August 2018 and the same period in 2019.

According to data from the Bank of Ghana, the NPLs reduced from 7.21 billion cedis to 6.91 billion cedis.

The Bank of Ghana’s report looked at activities of the twenty-three banks as at the end of August 2019.

It shows that the Non Performing Loans which is as a result of delays in repayment of loans, dropped by three hundred million cedis between August last year and the same period this year.

The reduction, the central bank report attributed to the policy where the banks are made to write off some loans after a certain period as well as the intensified loan recovery efforts of banks.

Meanwhile, for yet another time, the private sector accounted for 97.6 percent of the banks’ NPLs in August 2019, up from the 94.4 percent recorded in August 2018, while the public sector’s contribution declined to 2.4 percent from 5.6 percent over the same comparative period.

A further analysis of the report shows that the two largest recipients of credit, the commerce and finance sector and the services sector, also accounted for the largest proportions of NPLs in the banking industry in August 2019.

Their share of NPLs stood at 43.1 percent.

This was followed by the electricity, gas and water sector as well as manufacturing sector with share of NPL of 15.6 percent and 13.9 percent respectively.

The Mining and Quarrying sector accounted for the least share of industry NPLs of 2.1 percent.

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