BoG Governor Urges Banks to Expand Credit Access for SMEs
Governor of the Bank of Ghana (BoG), Dr. Johnson Asiama, has urged banks to expand access to finance for small and medium-scale enterprises (SMEs), particularly businesses operating within the agricultural value chain.
Dr. Asiama said Ghana’s economic conditions have improved significantly, with inflation declining, the exchange rate remaining relatively stable, financial conditions easing and interest margins becoming increasingly compressed.
Against this backdrop, he said the economy is beginning to record a strong rebound in credit creation.
However, the BoG Governor noted that many SMEs, particularly those in agriculture, continue to struggle to access financing because banks perceive them as relatively high-risk borrowers.
Dr. Asiama made the remarks during an engagement with chief executive officers of banks in Accra on Wednesday.
Banks Must Understand Businesses
The BoG Governor urged banks to deepen their understanding of the businesses and sectors they serve, particularly the unique characteristics of agriculture and its associated value chains.
“As banks, you are not merely financial intermediaries; you are important business partners in the growth and transformation of the economy,” he said.
He encouraged banks to develop innovative and flexible credit products that take into account the seasonal nature of agricultural activities.
Such products, he said, should align loan repayment schedules with the timing and pattern of borrowers’ cash flows.
“This should include developing innovative and flexible credit products that recognise the seasonal nature of agricultural activities and align loan repayment schedules with the timing and pattern of borrowers’ cash flows,” Dr. Asiama said.
He explained that a more flexible approach would allow SMEs to access financing on terms that better reflect the realities of their businesses while enabling banks to manage their risks more effectively.
According to him, expanding access to credit is also essential to ensuring that the benefits of Ghana’s improving macroeconomic conditions translate into increased economic activity and job creation.
