A community banking expert has warned Ghana’s rural and community lenders that the era of easy profits from elevated Treasury bill (T-bill) yields is over, urging institutions to move decisively into active lending or risk being left behind in a fundamentally changed environment.
Joseph Akossey, Executive Director of Proven Trusted Solutions Limited, said many community banks across the country built unusually strong earnings in recent years by parking customer deposits in short-term government securities rather than extending credit. That model has now collapsed. The 91-day T-bill rate, which averaged approximately 28 percent in 2024, has fallen to below 5 percent as the government deliberately moves toward longer-term domestic borrowing instruments and works to reduce rollover risk in its debt portfolio.
“This year is a year of credit,” Akossey said, making clear that community banks which continue to treat their lending operations as secondary will fall further behind.
The warning carries particular weight for community banks because their business models have historically leaned more heavily on government securities than those of larger commercial institutions. With that income stream now compressed, Akossey said boards and management must shift their focus from what he called supernormal profit to normal profit, accepting that the macroeconomic conditions which produced extraordinary returns are gone and are unlikely to return in the absence of a severe economic shock.
His prescription for community banks centres on several interconnected reforms. On lending, he said credit departments need to be treated as strategic assets rather than cost centres, with properly trained loan officers, strong appraisal systems and active pursuit of qualified borrowers. Community banks, he argued, must stop waiting passively for customers to apply for loans and begin marketing credit products the same way any other product is marketed.
He pointed specifically to microfinance as an underutilised opportunity, calling on institutions to revisit group lending models that work in urban settings rather than blindly copying rural methodologies in cities where the dynamics are fundamentally different. Akossey noted that some foreign financial institutions running urban microfinance programmes in Ghana are recording non-performing loan (NPL) ratios of below one percent, a performance level local institutions have not achieved despite operating in the same environment.
Susu loans also featured strongly in his recommendations. He described them as well suited to the current lower-rate environment because of their attractive interest structures and high recovery rates, supported by mobile bankers who maintain close contact with borrowers. He urged community banks to properly reward mobile banking staff, arguing that undervaluing their role is a strategic error given the direct relationship those staff maintain with reliable borrowers.
The Bank of Ghana’s (BoG) existing directive requiring institutions to bring NPL ratios below 10 percent by December 2026 adds regulatory urgency to Akossey’s call for stronger credit discipline, as any bank that expands lending carelessly to recover lost interest income risks breaching the threshold.
He acknowledged Nyakrom Community Bank, Juaben Community Bank, Twifo Community Bank, Kwahu Praso Community Bank and Ankobra West Community Bank for prioritising microfinance operations effectively.
On pricing, Akossey urged community banks to collaborate rather than undercut each other, noting that many still charge far lower fees for services such as ATM usage and SMS alerts than universal banks despite carrying similar operational costs. He described this as destructive competition that weakens the entire sector’s margins and called for coordinated pricing as a form of co-opetition within the industry.
