Secured Loan Agreement (Ghana)

A Secured Loan Agreement in Ghana sets the principal, interest, repayment schedule and security governing a loan between lender and borrower.

The Borrowers and Lenders Act 2020 (Act 1052) is the primary statute governing secured lending in Ghana and was enacted to replace and modernise the Borrowers and Lenders Act 2008 (Act 773). Act 1052 establishes the Collateral Registry administered by the Bank of Ghana, in which security interests over moveable property — including vehicles, equipment, inventory, accounts receivable, and financial instruments — must be registered to achieve priority against third parties. Section 3 of Act 1052 requires all security interests over moveable assets to be registered in the Collateral Registry within 14 days of creation.

The Mortgages Act 1972 (Act 392) governs mortgages over land and real property in Ghana. Section 3 of Act 392 provides that a mortgage of land in Ghana must be in writing and must be registered at the Lands Commission to bind third parties and to be enforceable against the mortgagor's estate in bankruptcy. The Land Act 2020 (Act 1036) consolidates land law in Ghana and regulates all dealings in land, including mortgages, pledges, and charges over land. The Lands Commission, established under Article 258 of the Constitution of Ghana 1992 and the Lands Commission Act 2008 (Act 767), is the body responsible for registering land transactions.

The Bank of Ghana (BoG) licenses and supervises banks, savings and loans companies, and other specialised deposit-taking institutions (SDIs) that provide secured lending under the Banks and Specialised Deposit-taking Institutions Act 2016 (Act 930). Licensed banks in Ghana — including GCB Bank Limited, Ecobank Ghana, Stanbic Bank Ghana, Absa Bank Ghana, and Fidelity Bank Ghana — are the primary institutional providers of secured loans. Non-bank lenders that provide secured credit to the public must be licensed by the Bank of Ghana.

The Ghana Revenue Authority (GRA) administers stamp duty on loan agreements and mortgage instruments under the Stamp Duty Act 2005 (Act 689). Stamp duty is payable on loan agreements and mortgage deeds at rates specified in Act 689. Failure to pay stamp duty renders a document inadmissible in evidence in Ghana's courts under Section 12 of Act 689.

The Income Tax Act 2015 (Act 896) regulates the tax treatment of interest income and withholding tax on interest payments in Ghana. Interest paid by a Ghanaian borrower to a non-resident lender is subject to withholding tax at the rate of 8% under Act 896 unless reduced by a double taxation agreement. Interest paid between resident parties is deductible by the borrower under Act 896 subject to thin capitalisation rules.

A Secured Loan Agreement in Ghana is needed whenever a lender wishes to advance funds to a borrower and requires security over the borrower's assets as protection against default, providing the lender with priority rights over unsecured creditors and the right to enforce the security if the borrower fails to repay.

A Secured Loan Agreement is required when a business incorporated under the Companies Act 2019 (Act 992) borrows from a bank or financial institution in Ghana and grants a fixed or floating charge over its assets as collateral. The security interest must be registered in the Bank of Ghana's Collateral Registry under the Borrowers and Lenders Act 2020 (Act 1052) to protect the lender's priority.

A Secured Loan Agreement is needed when an individual borrows money using their vehicle, machinery, equipment, or other moveable property as collateral. The lender takes possession of the asset's title documents — such as the DVLA vehicle registration certificate for a motor vehicle — or registers a security interest in the Bank of Ghana Collateral Registry under Act 1052.

A Secured Loan Agreement is required for a mortgage loan — where an individual or company borrows to purchase or refinance land or a building in Ghana, and the land or building is mortgaged to the lender under the Mortgages Act 1972 (Act 392). The mortgage must be registered at the Lands Commission under the Land Act 2020 (Act 1036) to be enforceable against third parties.

A Secured Loan Agreement is needed for agricultural loans where a farmer or cooperative borrows from a rural bank, a savings and loans company, or MASLOC and pledges agricultural equipment, livestock, warehouse receipts, or crops under the Ghana Warehouse Receipts System as security.

A Secured Loan Agreement is required for inter-company loans within a corporate group where the lending subsidiary takes security over the borrowing subsidiary's assets to protect the group's exposure in the event of the borrowing subsidiary's insolvency.

Parties in Ghana should prepare a Secured Loan Agreement before any advance is made. Courts of Ghana — including the High Court (Commercial Division) in Accra — interpret loan agreements based on the written terms under the Contract Act 1960 (Act 25). Registration of the security interest in the Bank of Ghana Collateral Registry under the Borrowers and Lenders Act 2020 (Act 1052) or at the Lands Commission under the Mortgages Act 1972 (Act 392) is essential for enforceability against third parties.

A binding Secured Loan Agreement in Ghana under the Mortgages Act 1972 (Act 392), the Borrowers and Lenders Act 2020 (Act 1052), and the Contract Act 1960 (Act 25) must contain the following essential elements.

Parties: Full legal names, addresses, and identity document numbers of the lender and the borrower. For companies, the company registration number from the Office of the Registrar of Companies (ORC) under the Companies Act 2019 (Act 992), the Tax Identification Number (TIN) from the Ghana Revenue Authority (GRA), and the names of authorised signatories must be stated. The borrower's SSNIT number should be recorded for individual borrowers.

Loan Amount and Disbursement: The principal amount of the loan stated in Ghana Cedis (GHS), the date or conditions for disbursement, and the bank account or mobile money account (MTN MoMo, AirtelTigo Money, Vodafone Cash) to which the loan proceeds will be paid. For loans in foreign currency, the applicable exchange rate and the Foreign Exchange Act 2006 (Act 723) compliance requirements must be addressed.

Interest Rate: The applicable interest rate — whether fixed or floating — stated as an annual percentage rate (APR). If linked to the Bank of Ghana Monetary Policy Rate (MPR), the margin above the MPR should be stated. The agreement must comply with the Bank of Ghana's interest rate guidelines where the lender is a licensed bank or SDI under the Banks and SDIs Act 2016 (Act 930). Compound interest provisions must be expressly stated.

Repayment Schedule: The repayment period, the frequency of repayments (monthly, quarterly, or bullet repayment at maturity), the amount of each instalment, and the method of payment. A repayment schedule table setting out the date, principal, interest, and outstanding balance for each payment provides clarity.

Security / Collateral: A precise description of the asset offered as collateral — including for real property: the location, plot number, title type (freehold, leasehold, or customary), Land Commission registration details, and whether it is registered under the Land Act 2020 (Act 1036); for moveable property: make, model, serial number, and DVLA registration number for vehicles; and for financial assets: the account number and the institution. The mechanism by which the security interest is created — mortgage deed, charge, pledge, or assignment — must be specified.

Registration of Security: A statement that the security interest will be registered in the Bank of Ghana Collateral Registry under Section 3 of the Borrowers and Lenders Act 2020 (Act 1052) within 14 days of execution (for moveable property) or at the Lands Commission under the Mortgages Act 1972 (Act 392) (for land). The agreement should allocate responsibility for paying registration fees and stamp duty under the Stamp Duty Act 2005 (Act 689).

Default and Enforcement: Events of default — including failure to pay on time, insolvency of the borrower, material breach of the agreement, and any enforcement action by another creditor — and the lender's remedies upon default, including acceleration of the entire outstanding principal, appointment of a receiver, taking possession of collateral, and sale of the collateral. For mortgages over land, enforcement must comply with the Mortgages Act 1972 (Act 392), including the statutory power of sale under Section 21.

Prepayment: The borrower's right (if any) to repay the loan early, whether a prepayment premium is payable, and the calculation of interest on early repayment.

Representations and Warranties: The borrower's confirmation that it has capacity to enter the agreement, owns the collateral free of prior security interests (other than as disclosed), and has no pending insolvency proceedings.

Governing Law: Ghana law as the governing law, with disputes referred to the High Court (Commercial Division) in Accra or to arbitration under the Alternative Dispute Resolution Act 2010 (Act 798) administered by the Ghana Arbitration Centre.

Forms-legal.com provides this Secured Loan Agreement template as a starting point for lenders and borrowers in Ghana. Parties should consult a solicitor enrolled with the Ghana Bar Association for high-value secured lending transactions. The Bank of Ghana Collateral Registry, the Lands Commission, and the Ghana Revenue Authority (GRA) are the key regulatory bodies for secured lending compliance in Ghana.