Deposit Money Banks’ (DMB) credit to the private sector contracted marginally by 1% during the second quarter of 2021 says a Bank of Ghana’s Monetary and Financial Developments report.
However, during the same period last year, credit to private sector grew by 2.8%. this broadly reflecting the heightened credit risks associated with the Covid-19 pandemic.
But the BoG says “Real growth in private sector credit has been marginally above the long-run trend since May 2021”.
According to the report, credit flow to the private sector remained concentrated in four sub-sectors, namely, Services; Commerce and Finance; Construction; and manufacturing.
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Despite the contraction, DMBs’ credit to the private sector and public institutions increased by GH¢2.56 million representing 5.7% in June 2021 but this was lower than the GH¢6.30 million (16.3%) recorded in June 2020.
Outstanding credit to the private sector at the end of June 2021 was GH¢42,743.45 million, compared with GH¢40,036.79 million same period last year.