BY Grace Zigah
The banking sector’s total credit to the private sector and public institutions has experienced a substantial decline, dipping to GH¢4.68 billion in June 2025 from GH¢11.35 billion recorded in June 2024.
This represents a year-on-year decline of 142%.
Decline In Credit Flows
The decrease in credit flows is largely attributed to a decline in credit to the public sector.
According to the Bank of Ghana’s July 2025 Monetary Policy Report, credit flows to the private sector also declined to GH¢6.690 billion in June 2025 from GH¢11,690.77 million recorded in the corresponding period of 2024.
Shift To Government And Bank of Ghana Securities
The decreased flow of credit to the private sector is due to a shift by banks to purchase both Government and Bank of Ghana securities, which has had a sustainable impact.
Despite this decline, private sector credit accounted for 95.05% of the flow in total outstanding credit in June 2025, up from 92.40% recorded in the corresponding period of 2024.
Sectoral Distribution of Credit Flows
The top five sectors with a significant share of credit flows are:
– Services: 76.53%
– Commerce and Finance: 17.65%
– Electricity, Gas and Water: 6.52%
– Manufacturing: 4.55%
– Agriculture, Forestry and Fisheries: 4.12%
Outstanding Credit To Private Sector
The outstanding credit to the private sector at the end of June 2025 was GH¢84.752 billion, compared to GH¢78.061 billion recorded in June 2024.
However, in real terms, private sector credit contracted by 4.48% relative to a 4.18% contraction over the same comparative period.
Impact On Banking Sector
Despite the decline in credit flows, banks’ profit increased by 32% to GH¢7.2 billion in June 2025.
This suggests that the banking sector is still performing well, despite the challenges in credit flows.
