The Non-Performing Loans (NPLs) of commercial banks in Ghana has reached GH¢7.96 billion as at June 2017.
The figure went up from the GH¢6.09 billion recorded in the same period in 2016.
The latest Banking Stability report by the Bank of Ghana shows that the NPL ratio has also gone up to 21.2 percent from the 18.8 percent recorded in the same period last year.
The Bank of Ghana’s banking sector stability report attributed the rising Non-Performing Loans (NPLs) to the debts due private sector businesses.
Of the estimated 8 billion cedis debt, the private sector accounted for as much as 95 percent; up from the 87 percent recorded the previous year.
This is also equivalent to about 7.6 billion cedis of the total NPLs.
It is also worth to note that most private sector non-performing loans were debts of indigenous enterprises.
These businesses accounted for 77.2 percent or 5.82 billion cedis of total NPLs in June this year.
This also represents an upward push from the 73 percent recorded in the previous year.
However, the public sector’s contribution to the banks’ non performing loans declined from 12.7 to 5.1 percent between June 2016 and the same period this year.
The central bank attributes this to the restructuring of the TOR and VRA debts during the review period.
Meanwhile, the Agriculture, Forestry & Fishing sector was the sector with the highest proportion of its loans (39.3 percent) being classified as non-performing as at end-June 2017.
It was followed closely by the Commerce & Finance Sector with a sectoral NPL ratio of 30.3 percent.
By: Pius Amihere Eduku/citibusinessnews.com/Ghana