The global banking sector continues to morph, confronting profound challenges that may seem as daunting as economic uncertainty or as seismic as a global pandemic. However, from these tumults, strategic adaptations have emerged, steering the industry towards a more resilient future. In Cambodia, the financial sector has demonstrated resilience despite experiencing slowed loan growth and rising non-performing loans. Per the International Finance Corporation’s report, the sector underwent exceptional loan growth before and during the pandemic, with an average growth rate of 20.
9 percent from 2018 to 2022. The country’s financial sector has maintained a significant level of deposit growth fluctuating at an average rate of 18. 1 percent, higher than the pre-pandemic level.
Despite this, the financial sector also faces the challenge of rising non-performing loans. The total non-performing loans have surged from $551 million in 2019 to a whopping $4. 7 billion, equivalent to about 30 percent of the estimated equity level for 2024. In Ghana, the Bank of Ghana (BoG) has reiterated its commitment to maintaining a stable macroeconomic environment amidst ongoing financial challenges. The central bank, through high-level engagement with the Ghana Union of Traders Association (GUTA), addressed concerns over the increasing cost of borrowing and wider impacts of recent monetary policies on trading activities.
The BoG acknowledged the necessity of proactive policy responses to global and domestic inflationary pressures, explaining that recent adjustments to the policy rate were critical for managing inflation expectations and ensuring the long-term purchasing power of individuals and enterprises. Despite these policy actions leading to elevated interest rates, the Bank stressed that such measures are vital for restoring economic confidence and fostering a balance in the economy’s long-term performance. The Bank’s agenda aligns with global best practices, disclosing the individual contributions from each MPC member to enhance transparency. However, prevailing utter silence regarding financial education hampers the future financial resilience. Despite significant achievements in financial access expansion, Ghana stands wobbly in terms of financial literacy, which could severely impact economic prosperity.
The need of the hour is to prioritize personal finance education, creating a cultural shift that normalizes financial conversations and makes financial literacy a sprawling public concern. Moreover, a key observation reveals the predominantly passive approach to personal finances. This inclination towards reacting rather than proactively managing finances could be provocatively addressed by introducing the fluidity and dynamism of finance tools into our financial consciousness. These tech-driven mechanisms facilitating real-time data analysis and a diverse range of financial solutions could inundate financial decisions making and simplify financial apathy. Fostering these insights, we drive home the point that enhancing financial literacy and encouraging proactive engagement with our financial resources are crucial. Through an amalgamation of technological finesse and a deep-seated understanding of how our finances function, collectively we can chart a course towards a financially sound future filled with economic prosperity and dignity.
