DBG to lower interest rates, ease borrowing costs
The Development Bank Ghana (DBG) has announced a strategic initiative aimed at significantly reducing interest rates in Ghana by utilizing long-term funding from its international development partners. According to DBG, the goal is to lower interest rates by approximately 8 percent over the next five years, a move that could provide substantial relief to businesses struggling under the burden of high borrowing costs.
Speaking on Joy New’s PM Express the Bank’s Chief Executive, Kwamina Duker, emphasized the importance of this initiative for the Ghanaian economy. He outlined that the bank’s strategy involves a gradual reduction in interest rates each year until the desired target is reached. The current average interest rate, according to the Bank of Ghana, stands at around 28 percent, with some borrowers paying up to 35 percent when additional charges are included.
Mr. Duker revealed that DBG is receiving substantial support from major international financial institutions, including the World Bank, the German Development Bank (KfW), and the European Investment Bank. This long-term funding will enable DBG to lend to commercial banks at lower rates, which in turn is expected to bring down the cost of borrowing for businesses and individuals across the country.
“We are aware that reducing interest rates in a significant way will be challenging, but with the commitment of our partners and the support of the regulatory authorities, we believe it is achievable,” Mr. Duker stated. He further highlighted that this initiative is not just about lowering rates but also about ensuring that the benefits of reduced costs of capital reach the end borrowers—local businesses, entrepreneurs, and SMEs—who are critical to Ghana’s economic growth.
Since its establishment in 2022, DBG has disbursed over ₵1.6 billion and has become a key player in the financial sector, focusing on long-term financing solutions that support sustainable business growth. Mr. Duker acknowledged that the high interest rates currently faced by businesses are stifling their growth potential, making it difficult for them to expand, create jobs, and contribute to the economy.
“Together with our development partners, we are working hard to ensure that our efforts directly impact businesses and help them thrive in this challenging economic environment,” Mr. Duker added. “The end goal for DBG is not just about numbers but about making a tangible difference in the lives of entrepreneurs and the broader Ghanaian economy.” Mr. Duker’s comments reflect a broader strategy to align DBG’s operations with national economic goals, particularly in driving down the cost of credit and fostering a more conducive environment for business development. By focusing on long-term funding and sustainable interest rate reductions, DBG aims to play a pivotal role in Ghana’s financial sector, contributing to the overall economic stability and growth of the country
