In a bold move to combat the rising issue of non-performing loans (NPLs) in Ghana, finance analyst Nelson Cudjoe Kuagbedzi has proposed that banks and financial institutions make the names of loan defaulters public. This suggestion aims to enhance the recovery of loans and instill a sense of discipline within the banking industry.
This call for transparency follows recent findings from the Bank of Ghana, which reported a decrease in the NPL ratio, falling to 18.9% in December 2025 from 21.8% the previous year. While this downward trend is encouraging, Mr. Kuagbedzi emphasized that the current level of bad loans remains alarmingly high, posing a significant threat to the overall financial stability of the sector.
The decline in the NPL ratio reflects a gradual improvement in asset quality during the latter half of the year, with a peak of over 23% observed between March and May. The data suggests that banks have intensified their efforts in recovering loans, including measures like loan write-offs and restructuring, all supported by improved macroeconomic conditions and stricter credit risk management.
When excluding severely impaired loans classified under the loss category, the NPL ratio shows an even more significant drop to 5.0% as of December 2025, down from 8.5% the previous year. This indicates notable progress in addressing the most problematic assets on banks’ balance sheets.
Despite these improvements, Mr. Kuagbedzi warned that a persistent weak loan repayment culture remains a critical challenge, particularly among large corporations and politically connected individuals who often default without facing severe repercussions. In a statement to Citi Business News, he highlighted the necessity of implementing stronger deterrents alongside existing recovery strategies, including legal actions and credit bureau notifications.
“It is essential for banks to regularly publish the names of defaulters in newspapers. The fear of public embarrassment can motivate borrowers to stay current on their loans,” he stated. He further argued that enhancing loan recovery could lead to more available capital for lending to productive sectors, reduce borrowing costs in the long term, and bolster confidence in the banking system.
Additionally, Mr. Kuagbedzi urged regulatory bodies to provide banks with clearer guidelines concerning disclosures and enforcement. He stressed the importance of balancing transparency with due process to prevent potential misuse while ensuring the stability of the financial sector.
