Credit to small and medium-scale enterprises (SMEs) and households was tightened recently as a result of low cash flow, unsatisfactory account operation and poor credit history, a credit conditions survey conducted by the Bank of Ghana (BoG) in October has revealed.
But credit stance for large enterprises and consumers eased reflecting improved economic expectation.
The Central Bank, which made this known, said: “Private sector credit continued to expand in the year. In nominal terms, credit grew by 43.8 percent on an annual basis in September 2012 compared to 25.5 percent a year ago. In real terms, credit to the private sector recorded an annual growth of 31.4 percent against 15.8 percent in September 2011.”
Also, it said the pace of growth in broad money supply slowed to 28.8 percent in September 2012 from 41.9 percent in September 2011, adding that the slowdown was largely driven by a decline in net foreign assets (NFA) of the country’s banking system.
“The banking system continued to show steady asset growth and profitability in the year to September 2012. Total assets increased to GH¢25.1 billion from GH¢20.3 billion in September 2011. The growth in assets was mainly funded by domestic deposits.”
The Central Bank said although the quality of loan portfolio in the banking industry continued to improve slightly over the period, the non-performing loans ration declined further to 13.1 percent in September 2012 from 13.4 percent in July 2012 and 15.7 percent a year ago.
Between July and September, this year, interest rate trends stabilized while the average three-month deposit rate moved up to 11.95 percent in September from 10 percent in July 2012, while lending rates edged up slightly to 25.7 percent from 24.7 percent recorded in July 2012.
On a year-to-date basis, the lending deposit spread narrowed to 13.8 percent in September from 14.7 percent in July 2012.
By Emelia Ennin-Abbey