According to information released by the Bank of Ghana (BoG), non-performing loans (NPL), or credit that has failed in the banking industry, rose by 49.4% to GH¢20.4 billion in June 2024 from GH¢13.7 billion during the same time the previous year. The central bank bemoaned this since it shows that throughout the review period, loans denominated in both local and foreign currencies declined.
According to the study, the industry’s nonperforming loan ratio climbed from 7.8 percent in June 2024 to 10.8 percent in June 2024 after being adjusted for the fully funded loan loss category. This increase was due to an increase in the stock of all categories of nonperforming loans. According to the research, the private sector, which receives the majority of the credit from the industry, is responsible for the majority of non-performing loans.
While the governmental sector’s share of NPLs fell to 4.4 percent from 4.5 percent during the same month last year, the private sector’s share increased slightly to 95.6 percent in June 2024 from 95.5 percent in June 2023.
It also showed that the sectors with the greatest NPL ratios were agriculture, forestry, and fishing, at 56.4 percent (up from 30.0 percent a year earlier), and transportation, storage, and communication, at 49.1 percent (up from 22.1 percent a year earlier).
The construction sector had an increase in its non-performing loan (NPL) ratio to 36.8 percent from 32.8 percent. The power, water, and gas sector saw a decrease to 20.6 percent from 7.8 percent, while the commerce and finance sector remained steady at 20.2 percent. The industry with the lowest NPL ratio, accounting for 13.7 percent in June 2024 (up from 12.7 percent the previous year), was mining and quarrying.
SOURCE https://dew360.net
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