[ 2021-02-10 ]

Growth rate of bank loan advances slows in 2020
The month of December witnessed the slowest annual
growth rate in bank advances seen in all of 2020.
That’s according to the latest summary of
Macroeconomic and Financial data released by the
bank of Ghana.

Total amount of loans advanced by banks in the
country at the start of 2020, stood at GHS46.5
billion, representing a growth rate of 30.6 per
cent over the loans advanced in January 2019.

The figure dropped marginally to GHS45.9 billion
in February, representing an annual growth rate of
25.8 per cent.

The annual growth rate for bank advances continued
to drop consistently in the subsequent months
ending at 5.8 per cent in December 2020.

Commenting on the slowdown in the annual growth
rate in loans advanced, banking consultant, Nana
Otuo Acheampong attributed the development to the
impact of COVID-19 but was confident the situation
would improve when the pandemic is brought under
control as well as when economic growth
stabilises.

“Now what is affecting growth is the unfortunate
incidence of COVID-19. While deposits have been
coming in, loan advances have not been as
anticipated because people are reluctant to
contract loans in this period because of the
uncertainty from the demand front. So that is the
issue affecting growth. But it is a temporary
issue. Once COVID-19 is over and the economy picks
up I’m sure the growth will start increasing
again,” he said.

Annual growth rate in total deposits into banks
however remained stable after slowing down in the
first quarter. Total deposits at the end of the
year 2020 stood at 103.8 billion Ghana Cedis
whereas the total assets for the sector as at
December 2020 stood at 149.3 billion.

Source - Ghanaian Times

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