The total value of secured loans by Deposit-Taking Institutions (SDIs) reached GH¢8.2 billion in the fourth quarter of 2024, marking a significant year-on-year increase of 38.9% compared to the GH¢5.9 billion recorded in Q4 2023.
Banks Lead Secured Loan Growth
Banks accounted for the largest portion of the secured loans, contributing GH¢5.7 billion in Q4 2024. This reflects a 26.7% increase from the GH¢4.5 billion recorded during the same period in 2023. Banks continue to dominate the lending landscape, underscoring their pivotal role in driving credit accessibility.
Significant Growth in SDIs
The total value of secured loans by Specialized Deposit-Taking Institutions (SDIs) also saw remarkable growth. SDIs recorded GH¢2.5 billion in Q4 2024, representing a substantial 78.6% increase from GH¢1.4 billion in Q4 2023. This surge highlights the growing contribution of non-bank institutions in meeting the credit needs of businesses and individuals.
Distribution of Secured Loans
A detailed breakdown of the distribution of secured loans reveals the following trends:
Banks’ Share Declines Slightly: Banks captured the largest share of the total value of secured loans in Q4 2024, holding 69.5%. However, this marks a decline from their 76.3% share in Q4 2023.
Microfinance Institutions: The share of secured loans by microfinance institutions decreased marginally to 1.4% in Q4 2024, compared to 1.7% in Q4 2023.
Finance Houses: Finance houses registered a smaller share, declining to 0.3% from 0.5% in Q4 2023.
Other Lending Institutions: The combined share of other lending institutions dropped slightly to 1.0% in Q4 2024, down from 1.2% in the corresponding period of 2023.
Implications for the Financial Sector
The steady growth in secured loans, particularly among SDIs, reflects increased confidence in the credit market and a broader push to diversify lending beyond traditional banks. While banks maintain a dominant role, the rising contributions from SDIs and other institutions indicate a more inclusive credit landscape. This growth is expected to support economic activities, particularly for small and medium-sized enterprises, as well as individuals seeking credit.
The trends underscore the importance of policies that encourage a balanced and competitive lending environment to sustain the momentum in credit expansion.
Story by : Mercy Addai Turkson #ahotoronline.com
