Ghana‘s domestic banks are gaining ground in the secured lending space, dramatically increasing their market share in the fourth quarter of 2024, according to the Bank of Ghana‘s (BoG) latest Quarterly Collateral Registry report.
The data reveals a significant shift in loan market dynamics, with domestically owned banks controlling 48.5% of secured loan values—nearly doubling their share from 25.4% in Q4 2023. This surge has come at the expense of foreign-owned banks, whose share in secured loans dropped to 51.5% from 74.6% over the same period.
The rise of local banks signals a strengthening domestic financial ecosystem, reducing reliance on foreign institutions and keeping more capital within Ghana’s economy. Analysts suggest this shift reflects:
Increased confidence in domestic banks, potentially driven by improved liquidity and risk management.
Tighter lending policies from foreign banks, possibly leading businesses to seek more flexible financing options locally.
A more competitive banking environment, compelling local players to aggressively expand their lending portfolios.
On the pricing front, secured loans saw some of the lowest interest rates in Q4 2024, with the average lending rate dropping slightly to 28.6%, compared to 28.8% in Q4 2023. This trend suggests a modest easing in borrowing costs, but rates remain notoriously high, particularly for smaller businesses and individuals.
Finance and Leasing Companies saw rates fall to 33.1% in Q4 2024 (from 38.8% in 2023). Rural and Community Banks recorded an average rate of 33.5%, down from 34.4%. Microcredit companies, however, increased their rates to 49.5%, up from 47.7%, a sign that informal-sector borrowers are still paying a premium for credit access.
The Commerce and Finance sector was the largest beneficiary, claiming 44.1% of total secured loans in Q4 2024, slightly up from 43.3% in Q4 2023. This suggests continued reliance on credit to drive trade and financial transactions.
Other key recipients included, Construction sector – 19.2%, Services sector – 15.9%, Manufacturing sector – 4.8%, Information & Communications – 3.9%, Mining & Quarrying – 2.9%, Agriculture, Forestry & Fishing – 2.2%
