Ghana’s central bank is pressing commercial banks to channel the country’s improving macroeconomic conditions into greater financing for small businesses and agriculture. This directive comes as private-sector credit rebounded sharply, expanding by 41.20% in June 2026, compared with only 8.60% a year earlier. The Bank of Ghana (BoG) emphasizes the need for lenders to support these vital sectors, which are crucial for economic growth and job creation.
Dr. Johnson Asiama, Governor of the Bank of Ghana, stated this at the Heads of Banks Meeting on Wednesday, August 12. After adjusting for inflation, credit to the private sector grew by 34.10%, marking a significant reversal from the tight financial conditions of the previous two years. This acceleration in credit reflects falling interest rates and easing financial conditions, which are important drivers of the recovery in lending across the economy.
This development fits into Ghana's broader economic story of moving from stabilization to active investment and production. Inflation declined to 4.60% in July from 5.30% in June, remaining below the lower boundary of the Bank of Ghana’s medium-term target of 8.00%. The Monetary Policy Committee also maintained the policy rate at 14.00% in July, creating a considerably less restrictive monetary environment for businesses. These improved conditions provide a strong foundation for banks to increase their lending activities.
Governor Asiama highlighted that despite the improved economic environment and growing demand for credit, many SMEs, especially those in the agricultural value chain, still struggle to access finance. Banks often perceive these businesses as relatively high risk due to factors like weather risk, commodity-price volatility, and seasonal revenues. He urged banks to become more sophisticated in understanding these risks rather than simply avoiding the sectors.
The central bank argues that lenders must develop products structured around agricultural production cycles. This means creating innovative and flexible credit products that recognize the seasonal nature of agricultural activities. Loan repayment schedules should align with the timing and pattern of borrowers’ cash flows, rather than expecting farmers to fit conventional monthly repayment models. This approach would enable SMEs to access financing on terms that better reflect the realities of their businesses.
Banks appear to have considerably more capacity to take on these risks than they did a year ago. Total banking-sector assets grew by 30.70% in June 2026, supported largely by deposits and shareholders’ funds. The industry’s capital adequacy ratio also strengthened significantly to 20.40% from 10.60% over the same period. Furthermore, asset quality improved substantially, with the non-performing loan ratio declining to 16.10% from 23.10%, indicating fewer problematic loans within the banking system. These robust financial indicators suggest that banks are in a stronger position to extend credit to a wider range of borrowers.
The push from the Bank of Ghana signals a strategic effort to ensure that economic recovery benefits all sectors, particularly those with high potential for job creation and food security. The success of this initiative will depend on banks' willingness to innovate their lending models and embrace the unique characteristics of SME and agricultural businesses. Policymakers will be watching closely to see if this increased capacity translates into tangible support for these crucial segments of the Ghanaian economy.