The Bank of Ghana's Monetary and Financial Developments Report for September 2021 has revealed that services, commerce and finance, construction and manufacturing subsectors attracted more credit from the financial sector in August 2021, whilst credit growth in the private sector lending, remained sluggish.
The report has it that the Deposit Money Banks’ (DMBs) credit to the private sector and public institutions increased by GH3,900.74 million (8.67 percent) in August 2021 compared to the GH6,118.97 million (15.75 percent) recorded in August 2020, indicating a -0.14 percent contraction in private sector credit in August 2021, compared to last year's 3.39 percent.
“Credit to the private sector increased by GH¢3,829.81 million (9.55%) in August 2021 compared with GH¢5,002.53 million (14.25%) recorded in the corresponding period of 2020. The private sector credit accounted for 98.18 percent of total flow of credit extended to both private and public institutions in August 2021 as against 81.75 percent recorded in the corresponding period of 2020.
Credit flow to the private sector remained concentrated in four sub-sectors which are: Services; Commerce and Finance; Construction; and Manufacturing. Outstanding credit to the private sector at the end of August 2021 was GH¢43,936.88 million, compared with GH¢40,107.08 million recorded same period last year,” it said.
According to the bank of Ghana, the contraction in credit disbursement to the private sector broadly, reflects supply-side aversion to risk as well as constrained demand in the loan market on account of pandemic-related uncertainties.
Source: Mohammed Bomanso Issah(Real Estate Times Africa)