The Bank of Ghana proposes requiring financial institutions to base lending decisions on borrowers' income and cash flows rather than on the value of collateral alone, according to a draft directive published on 9 October 2026 and detailed on 12 October.

The text covers banks, savings and loans companies, finance houses and financial holding companies under the supervision of the central bank. It requires verification of income, expenses, repayment history and the ability to service debt under adverse scenarios, in particular a rise in interest rates or a fall in income.

For businesses, the review should also cover past financial performance, projected cash flows, quality of management, the condition of the sector and the equity contribution. Lenders could use alternative data and analytical tools provided their operation is reliable, explainable and proportionate to the risk.

Real estate or movable collateral would remain acceptable, but it could no longer replace the analysis of repayment capacity. Its value would have to be reassessed regularly and independently of the teams responsible for granting the loan.

The draft also specifies that a loan meeting the default criteria must be classified as non-performing even if collateral covers the unpaid amount. This rule would limit the scope for delaying recognition of a default risk on the sole ground that an asset can be seized.

For households and small businesses, the change could translate into more systematic requests for proof of income, banking history and cash-flow projections. It could also reduce the weight of an asset offered as collateral in the decision, without however ensuring access to credit for borrowers whose income is irregular or difficult to document.

Consultation remains open until 30 November 2026. The institutions concerned would have until 30 June 2027 to adapt their governance, policies and procedures, before entry into force scheduled for 1st July 2027. These dates still belong to a draft subject to consultation and do not correspond to obligations already in effect.