Bank of Ghana directs banks to lower NPL ratios to 10% by 2026

The Bank of Ghana has issued a directive to all commercial banks to reduce their non-performing loan (NPL) ratios to a maximum of 10% by December 2026. Governor Dr. Johnson Pandit Asiama announced the mandate, emphasizing that the measure is critical for improving asset quality and strengthening the overall resilience of the banking sector. This policy shift is intended to sustain the momentum of the ongoing national economic recovery and ensure that financial institutions are well-positioned to support sustainable growth.

Recent data indicates a steady downward trend in the industry's NPL ratio, which fell from 20.7% in August 2025 to 18.7% in August 2026. While this decline marks positive progress, Dr. Asiama stressed that banks must enhance their risk management frameworks and internal controls to meet the new 10% threshold. The Governor further noted that all commercial banks in the country currently satisfy regulatory capital requirements, providing a stable foundation for the implementation of these tighter credit standards. He urged institutions to maintain adequate capital levels to safeguard against potential future shocks.

John Awuah, the CEO of the Ghana Association of Banks, highlighted the necessity for financial institutions to adapt to the changing financial landscape in light of the directive. He pointed out that achieving the target will require a more disciplined approach to lending and a robust focus on recovery efforts for existing bad debts. As the banking sector moves toward this 2026 target, the central bank expects improved credit availability for the private sector, driven by healthier balance sheets across the industry.