Foreign banks lose ground as local lenders gain in secured loan market – BoG report

Foreign-owned banks maintained their dominance in Ghana’s secured loan market during the fourth quarter of 2024 but saw a significant decline in market share, according to the latest Quarterly Collateral Registry Brief from the Bank of Ghana.

The report reveals that foreign banks’ share of secured loan issuance dropped from 74.6% in Q4 2023 to 51.5% in Q4 2024, while domestic banks increased their share from 25.4% to 48.5% over the same period.

This shift highlights the growing role of local banks in secured lending, even as foreign banks remain the leading players.

Lending Rates Across Financial Institutions

The report also provided an overview of average lending rates for secured loans. Banks remained the most competitive lenders, with an average rate of 28.6%, slightly lower than 28.8% in 2023.

Other financial institutions recorded the following lending rates:

• Finance and leasing companies: 33.1% (down from 38.8%)
• Rural and community banks: 33.5% (down from 34.4%)
• Savings and loans firms: 43% (down from 44.1%)
• Microfinance institutions: 46.5% (down from 51.1%)
• Microcredit companies: 49.5% (up from 47.7%)
• Finance houses: 59.4% (down from 60.3%)