BoG  To Address Credit Challenges

Dr. Johnson Asiama

The Bank of Ghana (BoG) says it’s working closely with the International Finance Corporation (IFC) to ensure the enactment of a new Borrowers and Lenders Act.

The new law is to address all bottlenecks that impede the advancement of credit to borrowers, especially Small and Medium-sized Enterprises (SMEs).

Dr. Johnson Asiama, Second Deputy Governor of the Central Bank, disclosed this in a speech read on his behalf at a stakeholders’ forum to consider the draft Borrowers and Lenders Bill to replace the Borrowers and Lenders Law (Act 773, 2008).

He said the new bill proposes fundamental changes to the current Act by encompassing the provisions of the Registry Rules and building on them comprehensively.


There is general consensus by stakeholders that the provisions of the Act in its current form are inadequate and deficient due to the absence of certain crucial provisions, he added.

These limitations in the Act, he said, defeat the broad objective of having a modern secure transactions regime that facilitates access to credit.

“Notable deficiencies of the current Act is illustrated by the glaring absence  of  provisions on priority of charges, effectiveness of security interest against third parties, application of proceeds, searches and inadequate provisions on enforcement of obligations of the borrower, limiting its application by excluding credit agreements where parties are considered not to be dealing at arm’s length, such as credit transactions arising out of familial relationship and shareholders’ loans even though this is an important source for credit to SMEs and the requirement for multiple registrations,” Dr. Asiama said.


To address some of these deficiencies and inadequacies of the Act, he said the Bank of Ghana (BoG), acting under the mandate set out in Section 7 of Act 773, issued a notice entitled the Rules for the Effective Implementation of the Borrowers and Lenders Act, 2008 (Act 773) in June 2012, which has become known simply as the Registry Rules.

However, administrative notices and guidelines are inadequate to drive change and it is therefore necessary to enact a new legislation to address the various challenges, he said.

[email protected]

By Cephas Larbi