BoG pledges action on NPL and high-interest rates in Savings and Loans sector
The Bank of Ghana has provided assurances to savings and loans companies operating in the country, pledging to take decisive steps to address the challenges posed by non-performing loans (NPLs) and persistently high interest rates.
Acknowledging the difficulties faced by operators in the sector, the central bank has made it a priority to ensure financial stability and restore confidence.
Speaking on behalf of the Bank of Ghana Governor during the 13th Annual General Meeting of the Ghana Association of Savings and Loans Companies, Mr. Osei Gyasi, the head of banking supervision at the central bank, stressed the importance of adhering to regulatory standards in order to safeguard the sector’s stability.
The Bank of Ghana expressed concern over the recent uptick in non-performing loans and the escalating funding costs, which it believes could potentially jeopardize the sector’s stability in the near future.
To mitigate these risks, Mr. Gyasi emphasized the necessity of implementing prompt corrective actions, curbing the upward trajectory of NPLs, and redirecting funding sources towards enhancing profitability and bolstering customer confidence.
Meanwhile, Tweneboah Kodua Boakye, the Executive Secretary of the Ghana Association of Savings and Loans Companies, disclosed that the sector is gradually recovering from the shocks induced by the implementation of the Domestic Debt Exchange Programme.
This revelation comes as a positive sign, demonstrating the resilience and adaptability of savings and loans companies in navigating the evolving economic landscape.
As the Bank of Ghana remains committed to upholding financial stability, the reassurances provided to savings and loans companies serve as a critical impetus for the sector to address the challenges at hand.
By prioritizing regulatory compliance and taking proactive measures to tackle non-performing loans and funding costs, the central bank aims to restore the sector’s health and foster an environment conducive to sustainable growth and profitability.