Total Value of Secured Loans in Q4 2024 Reaches GH¢8.2 Billion – BoG Report
The Bank of Ghana (BoG) has reported that the total value of secured loans issued by banks and Specialised Deposit-Taking Institutions (SDIs) in the fourth quarter (Q4) of 2024 reached GH¢8.2 billion. This marks a significant increase of 38.9% compared to the GH¢5.9 billion recorded in the same period in 2023. Banks were responsible for the largest portion, disbursing GH¢5.7 billion in secured loans, reflecting a 26.7% rise from the GH¢4.5 billion recorded in Q4 2023. Meanwhile, SDIs saw an even greater surge in loan issuance, reaching GH¢2.5 billion, which represents an impressive 78.6% growth from GH¢1.4 billion in the previous year. The sharp increase in secured loans suggests a rise in credit demand and a potential boost in economic activities facilitated by increased lending from financial institutions.
The distribution of secured loans indicates that banks continued to dominate the sector, accounting for 69.5% of the total loan value in Q4 2024, although this was a decline from the 76.3% share recorded in Q4 2023. Savings and Loans (S&Ls) institutions expanded their presence in the secured loan market, increasing their share from 13.3% in 2023 to 17.4% in 2024. Rural and Community Banks (RCBs) also showed growth, contributing 10.4% of the total loan value, up from 6.9% the previous year. However, Microfinance Institutions (MFIs) experienced a slight decline, with their share dropping from 1.7% to 1.4% within the same period. Additionally, Finance Houses recorded a minor decrease in their contribution, from 0.5% in Q4 2023 to 0.3% in Q4 2024, while the combined share of other lending institutions slightly declined from 1.2% to 1.0%.
The growing trend in secured loans demonstrates increasing access to credit across various financial institutions, with banks still leading but SDIs showing remarkable growth. The rise in the share of loans from Savings and Loans companies and Rural and Community Banks suggests a shift in borrowing patterns, possibly due to efforts to promote financial inclusion in smaller communities. On the other hand, the decline in microfinance and finance house contributions highlights ongoing challenges within those sectors. Overall, the significant year-on-year increase in secured loan values indicates that more businesses and individuals are leveraging credit for expansion and investment, contributing to economic development.
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