BoG Governor urges banks to redesign loans for agriculture-focused SMEs

Dr. Johnson Pandit Asiama, Governor of the Bank of Ghana (BoG), has urged banks to create more adaptable and creative credit products specifically designed for small and medium-sized enterprises (SMEs) in the agricultural sector. Despite the robust economic recovery and increased credit growth in Ghana, many SMEs in agriculture continue to face difficulties in obtaining financing due to banks' perception of these businesses as high-risk.

During a meeting with bank CEOs and executives, Asiama highlighted recent economic developments and the banking sector's progress. He emphasized that while the economy is improving and credit demand is rising, SMEs, particularly those in the agricultural value chain, still struggle to access financial support. Banks must shift away from conventional lending methods and gain a deeper understanding of their financing sectors, Asiama argued.

To better support these businesses, Asiama suggested that banks design loan products that account for the seasonal nature of agricultural operations. This approach would involve creating flexible credit products that align repayment schedules with the borrowing cycle, ensuring that SMEs can secure financing under terms that reflect their operational realities. Asiama asserted that this strategy would facilitate easier access to financing for SMEs in agriculture.

The governor's call for innovation in loan structures follows Ghana's financial environment improving, with the Bank of Ghana reporting a notable increase in credit creation. Private sector credit rose by 41.2% in June 2026 compared to 8.6% in the same period last year, while real private sector credit growth was at 34.1%. Asiama sees this positive trend as an opportunity for banks to broaden their support for productive sectors, noting that lower interest rates across the money market have started to boost credit flows to the private sector.

Moreover, the banking sector has shown signs of strengthening, with capital adequacy ratios reaching 20.4% in June 2026 from 10.6% a year prior, and non-performing loan ratios falling to 16.1% from 23.1% over the same period. Given that agriculture employs a large number of businesses and households and is a crucial source of raw materials for industry, Asiama's emphasis on enhancing access to productive credit for SMEs in the sector is timely and critical.