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15th August 2025 7:35:56 AM
4 mins readBy: Abigail Ampofo
The Bank of Ghana (BoG) has announced a ‘name and shame’ approach to promote responsible borrowing among wilful loan defaulters in a new directive. The financial institution announced this in a formal directive issued to all regulated financial institutions on August 14.
In the new directive, the Bank of Ghana instructed all regulated financial institutions to publish the names of individuals who deliberately refuse to repay loans (wilful loan defaulters), despite having the means, twice a year in national newspapers and on their websites.
“All banks and other regulated lenders will be required to publish the names of such defaulters twice a year, on June 30 and December 31, in at least two national newspapers and on their official websites, using a format provided by the BoG.”
These measures form part of BoG’s latest regulatory actions to curb rising non-performing loans (NPLs) and reduce risks to the profitability, liquidity, and solvency of the banking sector. The central bank has already notified all regulated financial institutions of the directives and published explanatory notes for the public.
Also, not only will the names of the defaulters be published, but they will also be barred from getting any loans from any accredited financial institution for up to about half a decade.
“People in Ghana who deliberately refuse to repay loans... could soon be banned from borrowing from any licensed bank or financial institution for up to five years.” Borrowers who default on more than two occasions will face a five-year credit ban.
“Borrowers listed as wilful defaulters on two or more occasions within ten years will face a mandatory five-year ban, or longer if the calculated prohibition period exceeds that duration,” it added. The restrictions also target directors of companies found to have engaged in fund diversion, misrepresentation, falsified accounts, or fraudulent transactions.
“Directors of companies that are wilful defaulters, where RFIs have identified siphoning/diversion of funds, misrepresentation, falsification of accounts, and fraudulent transactions with the directors’ consent or connivance, shall also be deemed wilful defaulters and prohibited from accessing credit for the same period as the defaulting company,” it said.
Who is a wilful defaulter
According to the Bank of Ghana, “A wilful defaulter is defined as a borrower who deliberately breaks loan agreements... or obtains it through fake documents or false collateral.”
According to the new directive, the BoG outlined the conditions under which an action will be classified as wilful default. BoG explained that a wilful default would be deemed to have occurred if any of the following events were noted:
i. The borrower has defaulted on their repayment obligations to the RFI even when they have the capacity to honour the said obligation;
ii. The borrower has defaulted on their repayment obligations to the RFI and has siphoned or diverted the funds for other purposes;
iii. The borrower has defaulted on their repayment obligations to the RFI and has provided falsified or misrepresented collateral or any other documentation in support of the loan application, thereby securing the facility through fraudulent means;
iv. The borrower has defaulted on their repayment obligations to two (2) or more RFIs concurrently. However, the borrower may be exempted as a wilful defaulter if evidence is provided to the RFI that their inability to meet repayment obligations is due to loss of employment, force majeure, or disability;
v. The borrower has defaulted on their repayment obligations and has relocated without the RFI’s knowledge of the new address; or
vi. The borrower has defaulted on their repayment obligations to the RFI and has, without the RFI’s knowledge or consent, disposed of or removed the movable or immovable assets pledged as security for the facility.
Guarantors of wilful defaulters are also mentioned as facing the same penalties as the principal borrower. “In the case where a guarantor of a wilful defaulter refuses to comply with the demand by an RFI for payment, despite having sufficient means to make payment, then such guarantor would also be treated as a wilful defaulter and prohibited from accessing credit for the same period as the defaulting company.”
In cases where a wilful defaulter intends to gain access to credit, it is expected that the borrower will pay off all debt and meet the criteria of the organisation’s obligations.
“A wilful defaulter may regain access to credit upon fully repaying all written-off loans and fees, and if the lender is satisfied with the borrower’s ability and willingness to meet future repayment obligations,” it noted.
The BoG is also enforcing stricter prudential limits, requiring banks and other financial institutions to keep their NPL ratio at or below 10% by the end of 2026. Microfinance institutions must maintain their existing limit of 5% From January 1, 2027, institutions exceeding these limits will be barred from paying dividends, issuing bonuses, or expanding their loan portfolios.
Also, BoG has directed that if a bank or financial institution (RFI) has more than 7% of its loans classified as non-performing loans (NPLs), it must send a monthly report on those bad loans to the Bank of Ghana (BoG), using a prescribed format. In their yearly (annual) report, these RFIs must also include a breakdown of NPL amounts by sector, according to BoG’s required categories.
Firstly, they must include “details of all loans they have written off, both for the current year and the total amount over time; any rules in this notice that they have broken or failed to follow; details of bad loans owed by related parties (including the borrowers’ names, amounts still owed, and how those loans are classified); details of loans from wilful defaulters (people who can pay but refuse to) and non-wilful defaulters (people who cannot pay due to genuine reasons) that have been written off, plus how much money has been recovered from them, using the format in Appendix II (3),” it added.
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