The Bank of Ghana (BoG) has through a receivership process been able to recover GHc731 million out of a total of GHc10.1 billion that was advanced to customers of banks affected by the clean-up in the banking sector.
The process has however been undermined by individuals that frustrate loan recovery process through court actions, fictitious acquisition of loan and poor documentation on loan transactions, which make it difficult to identify and pursue loan defaulters.
Dr Ernest Addison, Governor of BoG, made this known when he addressed heads of businesses in the private sector at the 4th edition of the CEO Summit held yesterday in Accra.
He disclosed that recoveries were made through loan repayment by customers, sale of vehicles and liquidation of bonds, among others.
In order to improve the rate of recovery, he said that the receivers have fully engaged the judicial system to assist in the recovery of assets from shareholders, directors and other loan defaulters.
“There are about 50 cases currently pending before our courts. Recovery process has not been without challenges with individuals involved resorting to court system to frustrate the process.
“Investigation so far has also revealed that some assets were not registered in the names of specific financial institutions but in the names of connected parties, making it difficult to disclose the underline collateral to offset the outstanding loans,” he said.
The Market Place Lending (MPL), he said, was of serious concern to BoG, as it posed a high risk.
The governor said the high MPL ratio, which was 18.7 per cent as of the end of March 2019, must be tackled.
He said that the high MPL ratio has implication for monetary policy conduct as it impedes the monetary transmission mechanism.