The Bank of Ghana (BoG) has urged banks to expand productive lending by developing flexible financing products tailored to small and medium-sized enterprises (SMEs), particularly in agriculture.

It said banks needed to understand the businesses and sectors they served better and design financing products that reflected their specific needs.

Dr Johnson Pandit Asiama, Governor of the Bank of Ghana (BoG), made the call at a meeting with Chief Executive Officers and Heads of Banks in Accra on Wednesday.

He said banks had a critical role beyond financial intermediation and should serve as important business partners in Ghana’s economic growth and transformation.

Dr Asiama urged the banking industry to take advantage of the improving economic environment to increase lending to productive sectors.

He said despite growing demand for credit, many SMEs, particularly those in agriculture, continued to face difficulties accessing finance because banks considered them relatively high-risk businesses.

Dr Asiama urged banks to develop flexible credit products that reflected the seasonal nature of agricultural activities and aligned loan repayment schedules with borrowers’ cash-flow patterns.

He said such an approach would enable SMEs to access financing on terms that better reflected the realities of their businesses and support growth across agricultural value chains.

The Governor said financial conditions had eased considerably, while interest margins had become increasingly compressed, resulting in a strong rebound in credit creation.

He said private sector credit had recorded significant growth, creating an opportunity for banks to channel more resources into productive sectors of the economy.

Dr Asiama also urged banks to strengthen customer engagement and financial education to promote compliance and confidence in banking services.

He expressed concern about increased incidents of returned cheques and non-compliance, urging banks to properly utilise approved overdraft facilities or available funds in linked accounts before returning cheques.

Dr Asiama called on banks to strengthen monitoring mechanisms and customer engagement to reduce repeat occurrences and improve the reliability of cheques as a payment instrument.

On digital lending, Dr Asiama urged banks to exercise heightened due diligence when dealing with digital credit service providers and verify their licensing status with the BoG before entering into partnerships.

He said the central bank had intensified efforts to address unlicensed digital lending activities, including the publication of entities operating without the requisite approval.

Dr Asiama also encouraged banks to develop dedicated investment products for Ghanaians in the diaspora to channel remittances beyond basic transfer services into savings and productive investments.

He said the BoG’s assessment showed that banks lacked sufficient off-the-shelf investment products specifically designed to meet the needs of the Ghanaian diaspora.

The Governor said expanding bank-led investment programmes, mobile money solutions and digital remittance platforms could deepen financial integration and mobilise diaspora funds for productive investment.

He assured the banks that the BoG would continue to provide the regulatory and policy environment necessary to support a sound, resilient and growth-oriented banking sector.

Dr Asiama called for continued partnership between the regulator and the banking industry to address emerging challenges and unlock opportunities for businesses, households and the broader economy.