Bank credit to the economy accelerated sharply in the first half of 2026, with gross loans and advances rising by 39.4 percent year-on-year to GH¢124.3 billion at the end of June, reflecting a significant increase in lending to private businesses and households.
The strong growth compares with just 5.5 percent recorded during the corresponding period in 2025, according to the Bank of Ghana’s July 2026 Monetary Policy Report.
The expansion was driven largely by increased lending to the private sector, as credit extended to private enterprises and households rose by 39.6 percent to GH¢119.1 billion at the end of June 2026.
This represented a significant improvement over the 9.2 percent growth recorded in private sector credit during the corresponding period of 2025.
The figures point to a strengthening role of the banking sector in supporting private sector activity, as businesses and households increasingly accessed credit for investment, working capital and other economic activities.
Credit to the public sector also returned to growth during the period, increasing by 5.6 percent to GH¢4.7 billion. This followed a sharp contraction of 31.3 percent recorded in the corresponding period of 2025.
The faster growth in private sector lending further increased the sector’s dominance in the allocation of bank credit.
The private sector accounted for 96.2 percent of total credit at the end of June 2026, compared with 95.1 percent a year earlier. The public sector’s share, meanwhile, declined to 3.8 percent from 4.9 percent.
The trend underscores the continued concentration of banking sector lending towards private enterprises and households, a development that could support business expansion, employment and broader economic activity if credit is channelled into productive sectors.
However, the distribution of credit across industries remained concentrated in a relatively small number of sectors.
The services sector continued to receive the largest share of industry credit, accounting for 36.6 percent of total lending at the end of June. Although the sector maintained its position as the largest recipient of bank credit, its share was marginally lower than in the corresponding period of 2025.
The commerce and finance sector was the second-largest recipient, accounting for 24.1 percent of total industry credit.
Construction recorded a notable increase in its share of bank lending, accounting for 10.7 percent of total credit by the end of June 2026.
Together, the services, commerce and finance, and construction sectors accounted for 71.4 percent of total industry lending.
This was slightly lower than the 72.3 percent recorded by the three leading sectors during the corresponding period in 2025, suggesting a modest diversification in the allocation of bank credit across the economy.
The sharp increase in credit growth comes amid improving macroeconomic conditions and a decline in lending costs, which have helped strengthen the capacity of businesses and households to access financing.
The latest data suggest that the banking sector is increasingly redirecting resources towards private sector activities, although the continued concentration of credit in a few sectors highlights the need for broader access to financing across agriculture, manufacturing and other productive areas of the economy.
Source: businesspostonline
