The stock of non-performing loans (NPLs) in Ghana’s banking sector declined to GH¢19.9 billion at the end of June 2026, down from GH¢20.7 billion a year earlier.

New data from the Bank of Ghana show that the industry’s NPL ratio also improved significantly, falling to 16.1% in June 2026 from 23.1% in June 2025.

The NPL ratio, adjusted for the fully provisioned loan loss category, similarly declined to 4.6% from 8.5% over the period.

Breakdown of the Numbers

Private sector borrowers continued to account for the overwhelming majority of non-performing loans in the banking industry.

The private sector’s share of total NPLs increased to 98% in June 2026 from 96.4% a year earlier.

By contrast, the public sector’s contribution fell from 3.6% to 2%.

“The distribution of NPLs remains broadly consistent with the sectoral composition of industry credit exposures,” the Bank of Ghana report stated.

The central bank said asset quality strengthened broadly across the banking industry during the period, supporting the decline in the overall NPL ratio.

The improvement was recorded across most sectors, except agriculture, forestry and fishing.

The NPL ratio for that sector increased to 65.1% in June 2026 from 59.1% in June 2025.

The Bank of Ghana, however, said improvements in other sectors more than offset the deterioration in agriculture, resulting in an overall strengthening of the banking industry’s asset quality.

Reasons for the Improvement

According to the Bank of Ghana, the improvement was driven by reductions in both the stock of non-performing loans and the overall NPL ratio.

The central bank said the stronger performance of the credit portfolio reflected enhanced loan recovery efforts and improved credit risk management practices.

It added that the developments point to better credit risk conditions, although vulnerabilities in asset quality remain a concern.

A sustained decline in NPLs could also support a gradual reduction in the cost of credit, although any decline in interest rates may be marginal.

The level of non-performing loans remains important to banks’ willingness and ability to extend credit to businesses and households.

Credit Portfolio Analysis

Bank of Ghana data also show a significant acceleration in credit growth during the review period.

Gross loans and advances increased by 39.4% year-on-year to GH¢124.3 billion at the end of June 2026.

This compares with a much slower 5.5% growth recorded in June 2025.

The expansion was driven mainly by stronger lending to the private sector.

Credit to private enterprises and households rose by 39.6% to GH¢119.1 billion, compared with 9.2% growth a year earlier.

Credit to the public sector also recovered, growing by 5.6% to GH¢4.7 billion after contracting by 31.3% during the corresponding period in 2025.

As a result, the private sector’s share of total bank credit increased to 96.2% from 95.1%.

The public sector’s share, meanwhile, declined to 3.8% from 4.9%.

The data show that bank lending remained concentrated in a few key sectors.

The services sector accounted for the largest share at 36.6%, followed by commerce and finance at 24.1%.

Construction recorded a notable increase, accounting for 10.7% of total industry credit.

Together, the three sectors accounted for 71.4% of total industry lending, slightly below the 72.3% recorded a year earlier.

The Bank of Ghana said financial soundness indicators remained broadly positive in June 2026, supported by improvements in solvency, core liquidity and asset quality.

“Efficiency and profitability indicators, however, showed mixed trends during the review period,” the report added.