Average lending rate rises to 36% in February
Ghana’s lending rates have been a major cause of concern for both individuals and businesses alike. The Bank of Ghana’s latest data reveals that the average lending rates rose marginally to 36.64% in February 2023 from 35.58% recorded in December 2022.
This is equivalent to a monthly interest rate of 3.02%. Despite the rise in lending rates, the Monetary Policy Committee of the Bank of Ghana is expected to announce developments in the Ghanaian economy today, particularly its key lending rate – Policy rate. Experts predict that the policy rate will remain unchanged for the next two and a half months, which will keep lending rates still high.
Ghana’s average lending rates have been increasing sharply for the past one year, with a 16.48% increase since January 2022. This surge in lending rates has been attributed to a record inflation rate and significant exchange rate depreciation, which have increased the cost of doing business in the country.
The high lending rates have made it challenging for individuals and businesses to access credit and invest in their future.
It is worth noting that the average lending rates vary among banks, and the respective sectors they lend to. Some banks offer loans equivalent to the Ghana Reference Rate of 33.25%, whilst others charge rates as high as 43%.
Additionally, lending rates are often influenced by the risk profile of the customers. For example, lending to the agriculture and construction sectors is perceived as riskier, and therefore, credit to these sectors tends to be more expensive.
The high lending rates in Ghana are a cause for concern, as they can stifle economic growth and development. The lack of access to affordable credit can limit individuals’ and businesses’ ability to invest in their future and take advantage of growth opportunities.
It is, therefore, essential for banks to provide fair and transparent lending practices and consider the risk profile of their customers. Additionally, individuals and businesses should shop around and compare lending rates offered by different banks to find the most affordable and suitable option for their needs.
In conclusion, the rise in lending rates in Ghana is a worrying trend that needs to be addressed urgently. The government, the Bank of Ghana, and banks must work together to implement policies and practices that ensure affordable credit access for individuals and businesses. Failure to do so could limit economic growth and development, leading to long-term negative consequences for the country.
