How bank recapitalization and ownership shape agricultural finance in Ghana: A note

This study examines the heterogeneous effects of recapitalization and the origin of banks on agricultural finance in Ghana, using panel data from 2015–2018 (pre-recapitalization) and 2019–2022 (post-recapitalization). Fixed effects regression with robust standard errors was employed, incorporating macroeconomic indicators (interest rate, inflation) and bank-specific variables (capital adequacy ratio, non-performing loans). Results show that recapitalization improved agricultural financing. Regional banks increased lending compared to foreign banks, while indigenous banks reduced lending. Macroeconomic and bank-specific factors also influenced agricultural finance differently. Policies should incentivize domestic banks to support the agricultural sector in enhancing food security and reducing dependence on foreign aid.