Borrowers in Ghana who intentionally refuse to repay loans could soon be blacklisted from accessing credit for up to five years, under new directives issued by the Bank of Ghana (BoG).

The central bank’s updated regulations aim to crack down on wilful loan default, a growing problem linked to rising non-performing loans (NPLs) in the banking sector. The measures are designed to protect financial institutions from liquidity, profitability, and solvency risks.

Public Naming and Shaming

Under the new rules, commercial banks and other regulated lenders will be required to publish the names of wilful defaulters twice a year, on June 30 and December 31, in at least two national daily newspapers, as well as on their official websites. The listings must follow a prescribed format set by the BoG.

Who Qualifies as a Wilful Defaulter?

According to the BoG’s definition, a borrower will be classified as a wilful defaulter if they:

  • Have the means to repay but refuse to do so.
  • Divert loan funds to purposes other than agreed.
  • Obtain a loan through fraudulent collateral or falsified documents.

Tough Credit Restrictions

The directive bars regulated financial institutions from issuing new loans to anyone on the BoG’s approved write-off list. The credit restriction period will be twice the duration between the loan write-off date and the borrower’s final repayment.

Borrowers flagged as wilful defaulters two or more times within a decade will automatically face a minimum five-year credit ban — or longer if the calculated prohibition period exceeds five years.

The measures will also apply to company directors found guilty of diverting funds, falsifying accounts, misrepresentation, or engaging in fraudulent transactions.

Restoring Credit Eligibility

Defaulters can regain access to credit only after repaying all written-off loans in full, including fees, and satisfying their lenders that they can meet repayment obligations in the future.

Prudential Limits to Rein in NPLs

To keep the financial sector stable, the BoG is also enforcing stricter prudential NPL limits:

  • Banks and other regulated institutions: Must reduce NPL ratios to 10% or below by the end of 2026.
  • Microfinance institutions: Must maintain their existing limit of 5%.

Starting January 1, 2027, institutions that exceed these limits will be barred from paying dividends, issuing bonuses, or expanding their loan books until compliance is restored.

The BoG says these measures are part of a broader strategy to enforce discipline in the credit market and improve the overall health of Ghana’s banking system.

Source: Myjoyonline.com