Finance Houses Record Highest Average Lending Rate at 58.8% in Q3 2024
Finance Houses posted the highest average lending rate among financial institutions in the third quarter of 2024, according to the Q3 2024 Collateral Registry Brief by the Bank of Ghana.
The average rate stood at 58.8%, a slight increase from 58.6% in Q3 2023.
Microfinance Institutions followed, with an average lending rate of 47.5% in Q3 2024, down from 49.9% in the same period last year.
Conversely, Leasing Companies recorded the lowest average lending rate at 13.8% for Q3 2024, a significant decline from 28.1% in Q3 2023.
Banks registered an average lending rate of 31.1% for secured loans in Q3 2024, reflecting a 4.5 percentage point increase from 26.6% in Q3 2023.
Finance and Leasing Companies reported an average lending rate of 32.2%, up from 30.5% a year earlier, while Rural Community Banks (RCBs) saw their rate decline slightly to 34.3% from 35.3%.
Savings and Loans Companies also experienced a decrease, with average lending rates dropping to 42.3% in Q3 2024 from 44.1% in Q3 2023.
Secured Loans Market Expands
The total value of secured loans granted by banks and Specialised Deposit-Taking Institutions (SDIs) reached GH¢5.6 billion in Q3 2024, up 2.8% from GH¢5.5 billion in Q3 2023.
Banks accounted for the lion’s share at GH¢3.5 billion, though this marked an 18.7% decline from the GH¢4.3 billion recorded in Q3 2023.
SDIs, however, recorded robust growth, with secured loans surging by 75.0% to GH¢2.1 billion, compared to GH¢1.2 billion in the prior year.
Market Shares by Institutions
Banks continued to dominate the secured loans market, holding 62.3% of the total value in Q3 2024, though this was a decline from 78.8% in Q3 2023.
Savings and Loans Companies increased their share to 23.4%, up from 12.7% in Q3 2023, while RCBs expanded to 10.2% from 5.3%. Microfinance Institutions also recorded growth, with their share rising to 2.2% from 1.7%.
Finance Houses saw a marginal decline in their share of secured loans, dropping to 0.3% from 0.5%, while the cumulative share of other lending institutions increased to 1.6% from 1.0% over the same period.
Sector Trends
The report highlights shifting dynamics within Ghana’s financial sector. The rise in SDI lending underscores their growing role in addressing credit demand while fluctuating lending rates reflect divergent cost structures and risk appetites across institutions.
The data suggests a continued realignment in market shares, driven by varying growth trajectories among financial institutions.
