The Bank of Ghana (BoG) has announced a new directive that may prevent willful loan defaulters from accessing credit for up to five years. This measure aims to reduce the rising non-performing loans (NPLs) and safeguard the stability of the financial sector. The directive targets borrowers who intentionally refuse to repay loans despite being financially capable, as well as those who misuse funds for unauthorised purposes, secure credit using falsified documents, or submit fraudulent collateral. According to the new rules, all commercial banks and regulated lenders are required to publish the names of these defaulters twice a year—on June 30 and December 31—in at least two national newspapers and on their websites.
Who is a willful defaulter
A borrower is considered a willful defaulter if they misuse loan funds for unauthorized purposes, obtain credit using falsified collateral or fraudulent documents, or refuse to repay the loan despite having the means to do so. Once the central bank approves a loan write-off, the borrower will be prohibited from accessing all regulated credit facilities for a period equal to twice the duration between the write-off approval and the complete settlement of the debt.
Repeat offenders, specifically those designated as such twice or more within a ten-year period, will automatically face a five-year ban, or a longer prohibition if the calculated duration exceeds five years.
Sanctions will also extend to company directors, guarantors and associates found to have aided in fraudulent conduct or the diversion of funds. Defaulters must repay all outstanding debts and fees, clear their record with credit bureaus, and demonstrate a credible repayment capacity to regain access to credit. The BoG says the directive, issued to all regulated financial institutions on August 13, is part of its broader effort to strengthen credit discipline, enhance lender confidence and safeguard banking sector profitability and liquidity.
By: Nerteley Nettey
