Credit to the private sector (large enterprises, short-term and long-term enterprise loans) remained tightened in October, November and December 2019, according to a Bank of Ghana Survey.

There was, however, a net ease in banks’ credit stance on loans to small and medium enterprises (SMEs) in October 2019 but further tightening in November and December.

But credit growth rebounded in October 2019 compared to the contraction a year ago. Gross loans and advances (excluding the loans under receivership) increased by 17.2 per cent to GHS41.65 billion in October 2019 from GHS35.53 billion. This represents a year-on-year growth of -7.6% in October 2018. Private sector credit also recorded a rebound in growth by 13.1% to GHS37.13 billion during the review period after contracting by 3.1% in October 2018 to GHS32.82 billion.

Credit to households, however, declined from GHS8.64 billion representing 47.2% annual growth to GHS8.48 billion, representing a contraction of 1.8% during the period under review, partly reflecting base drift effects.

The share of public sector credit in total credit increased to 10.8% in October 2019 from 7.6% in October 2018, stepping down the share of loans to the private sector to 89.2% from 92.4 per cent during the same period.

The rise in the share of the industry’s credit to the public sector was on the back of increases in all the subcomponents, namely, credit to the government, public institutions and public enterprises.

In particular, the share of loans to central government increased to 3.8% from 2.6%, while that of public enterprises increased to 4.5% from 4.2%.

Lastly, the share of public institutions also increased to 2.5% from 0.8% during the same comparative period.

In sectoral analysis, the share of loans to the services sector was 22.7% in October 2019, closely followed by the commerce and finance sector with a share of 22.3%.

This is against 21.0% and 24.6% for the services and commerce and finance sectors respectively in the same period last year.

The manufacturing sector held a share of 11.5% of the banking industry’s credit, up from a share of 10.5% a year earlier constituting the third largest recipient, while the construction sector’s share was 8.7% from 8.0% share recorded last year.

The lowest recipient of industry credit remained the mining and quarrying sector although with an increased share of 3.2% in October 2019 from 2.6% a year ago.

The top three recipients of the industry’s credit (services, commerce and finance, manufacturing sectors) accounted for 56.5% share in bank credit in October 2019 while the lowest three recipients (mining & quarrying, agriculture, forestry & fishing, transport, storage & communication sectors) held a combined share of 16.5 percent of the industry’s credit during the same period.