Though Ghana’s macroeconomic indicators are wanting more and more promising, hundreds of thousands of enterprise homeowners are nonetheless leaving industrial banks empty-handed or with loans far better than official benchmarks recommend.
Regardless of the decline in benchmarks, common lending charges stay excessive at 19.7% as of February 2026, with some banks nonetheless pricing loans as excessive as 28% relying on the chance profile of the borrower. Banking and monetary guide Dr Richmond Atuahene says this hole isn’t any coincidence. That is the results of a mixture of structural flaws, and can’t be solved by coverage price cuts alone.
burden of dangerous money owed
In keeping with Dr Atuahene, probably the most persistent trigger is the issue of non-performing loans (NPLs) within the banking sector. Though the non-performing mortgage ratio in February 2026 declined to 18.7% from 22.6% in the identical interval final yr because of the restoration in financial institution credit score and discount in non-performing mortgage inventories, the Financial institution of Ghana (BoG) maintains that the extent stays excessive and requires continued coverage consideration.
Almost one in 5 loans are by no means repaid. Dr. Atuahene explains that banks reply by including a danger premium to all debtors, that means that dependable entrepreneurs successfully subsidize the default of different corporations via larger rates of interest.
locked up capital
The second hidden price lies within the BoG’s money reserve obligation (CRR), which at the moment requires banks to carry between 15% and 25% of central financial institution deposits. Dr Atuahene revealed that these reserves carry zero curiosity for industrial banks, forcing them to levy further prices on the remaining funds accessible for lending to guard their margins.
Operational and authorized points
Working prices additional complicate issues. Administrative, expertise and utility prices account for greater than 50% of financial institution income, leaving little room to soak up rate of interest cuts. Authorized restoration provides a further layer. Dr. Atuahene notes that it may possibly take three to seven years for courts to situation judgments on mortgage restoration, and collateral auctions are routinely held up by bureaucratic delays, corruption, and authorized interference. Yearly, uncertainty creates a danger premium for potential debtors.
Though Ghana’s coverage rate of interest has fallen from a excessive stage of 30% in 2023 to 14% in March 2026, industrial banks are sometimes gradual to regulate rates of interest downward, with lending charges nonetheless hovering between 18% and 19.7%.
Exit
Dr. Atuahene argues {that a} multifaceted response is required. He has referred to as on the central financial institution to decrease its reserve necessities to unencumber extra funding for loans, and for industrial banks to extra intently align their inner benchmark rates of interest with the declining Ghana Reference Price (GRR). The GRR stood at 10.03% as of Might 6, 2026, a distinction of practically 10 share factors from the precise lending price, which equates to billions of cedis in extra prices paid by Ghana’s non-public sector annually.
The central financial institution governor has expressed an ambition for lending charges to fall under 10% by the tip of his time period, and the central financial institution goals to scale back the non-performing mortgage ratio to 10% by the tip of 2026. Whether or not structural reforms hold tempo with that ambition will decide whether or not cheaper capital in the end reaches the entrepreneurs who want it most.
