Private sector credit fell significantly by 14.7% between January 2020 and September 2020, according to the Bank of Ghana’s latest Statistical Bulletin on developments in the monetary economy.

This however comes despite growth in loans and advances during the period.

The covid-19 pandemic is largely the rationale behind the significant decline in loans to the private sector.

Joy Business learned that majority of the 23 banks reviewed their credit policy during the epic period of the covid-19 pandemic, a situation which triggered suspension or deferment of loans and advancement particularly to the private sector.

However, existing but credit worthy clients were still given loans.

According to the Monetary Indicators, private sector credit grew at 26.8% in January 2020 but fell to 14.2% in June 2020, a period in which the economy was in partial lockdown.

Meanwhile, total loans and advancement grew by GH¢2.6 billion to GH¢47.4 billion between January 2020 and October 2020.

More importantly, the growth slowed down in June 2020 and July 2020 due to the uncertainty in the economy during those periods.

Overall, the Bank of Ghana said asset growth remains stronger, and new advances have increased from the beginning of the year to August 2020.

September 2020 Banking Sector Report

Banks’ total assets increased by 23.8% year-on-year to GH¢142.6 billion as at end-August 2020, compared to a growth of 10.1% a year earlier.

According to the Central Bank, the growth was broad-based and reflected in both domestic and foreign assets, which went up by 24.5% and 15.6%, respectively.

The relatively higher domestic asset growth pushed its share in total assets to 92.4%, up from 91.8 percent over the period.