Abstract:
The purpose of this study is to investigate the antecedents of credit risk in Ghana’s banking
sector within the context of policy rate, inflation rate, exchange rate, and cost efficiency.
The study relied on 10-year secondary data from 18 Ghanaian-resident universal banks
spanning from 2012 to 2021. The study adopted an explanatory research design and
quantitative approach together with a panel robust least squares estimation technique. The
results indicated that policy rate and cost efficiency have negative and significant impacts
on credit risk whereas exchange rate and inflation positively predict credit risk. The study
concludes that directing policy interventions towards policy rate, exchange rate, inflation
and cost efficiency is the surest way of curbing credit risk in Ghana’s banking sector. It
was therefore recommended to the Bank of Ghana to ensure an optimum policy rate that
will protect the banking sector, control inflation and promote business activities in the
country. Additionally, radical industrialization programmes should be embarked on to
reduce the massive importation so as to curb the debilitating currency depreciation. Finally,
banks should also ensure stringent internal control measures to enhance operational
efficiency.
Description:
A Dissertation in the Department of Accounting,
School of Business, submitted to the School of
Graduate Studies, in partial fulfillment of the
requirements for award of the degree of
Master of Business Administration
(Accounting)
in the University of Education, Winneba
