Financial and tax expert Nelson Cudjoe Kuagbedzi has suggested that banks and other lending institutions make public the identities of borrowers who default on loans, arguing that such a measure would enhance recovery efforts and promote accountability within the banking industry.
His recommendation follows the release of Bank of Ghana figures showing a reduction in the non-performing loan (NPL) ratio to 18.9 percent as of December 2025, down from 21.8 percent recorded in the same period the previous year.
Although he acknowledged the improvement, Mr. Kuagbedzi noted that the proportion of distressed loans remains too high and continues to present a threat to the health of the financial system.
The latest figures extend a gradual improvement in asset quality seen in the latter half of the year, after NPL levels exceeded 23 percent between March and May. The easing trend suggests that banks have stepped up recovery actions, including restructuring facilities and writing off bad debts, aided by more stable macroeconomic conditions and stronger credit risk controls.
A sharper improvement emerges when severely impaired loans classified as losses are removed from the calculation. Under this measure, the NPL ratio declined significantly to 5.0 percent in December 2025, compared with 8.5 percent a year earlier, indicating progress in addressing the most problematic loans on banks’ books.
Despite these gains, Mr. Kuagbedzi warned that poor repayment habits persist, particularly among large corporations and politically connected borrowers, whom he said often default without facing meaningful repercussions.
Speaking in an interview with Citi Business News, he argued that additional deterrent measures are needed to reinforce existing tools such as legal action and credit bureau reporting.
He proposed that lenders regularly disclose the names of loan defaulters in newspapers, noting that public exposure could discourage defaults. “No one wants to be publicly named. Once borrowers know their identities could be published, they will take repayment obligations more seriously,” he said.
Mr. Kuagbedzi added that stronger recovery rates would allow banks to channel more funds into productive sectors, reduce borrowing costs over time, and strengthen trust in the financial system.
He also urged regulators to provide clearer frameworks to guide disclosure and enforcement, stressing that while transparency is important, it must be applied with safeguards to prevent misuse and protect overall financial stability. bn