BoG to issue new Credit Risk Directive as NPL ratio in the Savings and Loans sector deteriorates

The Bank of Ghana (BoG) has announced plans to issue a Credit Risk Management Directive to strengthen lending practices, improve loan recovery and address rising non-performing loans (NPLs) in the financial sector.

She said the directive would require Regulated Financial Institutions (RFIs) to establish robust credit risk management frameworks covering credit underwriting, loan administration, risk measurement, monitoring, and recovery.“This directive aims to ensure that Regulated Financial Institutions (RFIs) develop and implement appropriate frameworks for managing their credit risk by establishing a robust credit risk environment; a sound credit-underwriting process; and maintaining appropriate credit administration, measurement, monitoring, and recovery processes and functions.”