Inability to repay loans contributes to what is known as non-performing loans (NPLs)
Many individuals and business owners turn to financial institutions for loans, hoping to use the funds to grow and expand their businesses. Unfortunately, not all ventures succeed, and some borrowers find themselves unable to repay their debts, leaving banks exposed to financial losses.
This inability to repay loans contributes to what is known as non-performing loans (NPLs).
NPLs occur when borrowers are significantly behind on payments (typically 90 days or more) or are unlikely to repay at all. They weigh heavily on banks, eroding profitability and limiting their ability to lend further.
Although recent data from the Bank of Ghana shows that the non-performing loan ratio declined to 18.9 percent in December 2025, down from 21.8 percent a year earlier, it remains a cause for concern.
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In an interview with Citi Business News, finance and tax analyst Nelson Cudjoe Kuagbedzi suggested that banks adopt tougher measures to recover loans.
One of his proposals is for financial institutions to publish the names of loan defaulters in newspapers.
“Banks must periodically publish the names of defaulters in the dailies. Nobody wants to be embarrassed. Once names are published, borrowers will be on standby because they know that if they default, their names will be exposed publicly,” he explained.
Kuagbedzi added that such transparency would not only improve loan recovery but also instill greater discipline among borrowers.
He further noted that stronger recovery mechanisms would free up capital for lending to productive sectors, reduce borrowing costs over time, and enhance public confidence in the banking system.
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Source:
www.ghanaweb.com