High lending rates choking SME growth – GCYE
By Praisebell Rosemond Larbi
The Ghana Chamber of Young Entrepreneurs (GCYE) has expressed concern over the prevailing high lending rates to small and medium enterprises (SMEs), describing them as daunting and a major constraint to business growth.
The Chamber’s remarks follow the Bank of Ghana’s publication showing that commercial banks offered loans at annualized percentage rates (APR) ranging from 17% to as high as 45% as of June 2025.
Speaking to the media, Sherif Ghali, Chief Executive Officer of the GCYE, called for a reduction in rates to make Ghanaian businesses more competitive within the sub-region.
“For me it is so high, and high borrowing capital eats into working capital, suppressing expansion, especially the people I lead who are young people. If the first option to get funding are traditional banks and they are offering rates this high, it is not good,” he said.
“This does not augur well for encouraging an entrepreneurial economy,” he added, voicing his frustration.
Mr. Ghali further proposed the establishment of a comprehensive credit system to better support SMEs, stressing the need for long-term financing options. He urged policymakers to introduce targeted policies, robust risk assessment mechanisms, and digital credit models to expand access to funding.
“The people whom I lead are young people, and some of them cannot go to the bank to raise credit facilities or capital. Ghana’s rate is not healthy for expansion and trade. We cannot compete. This is a call for the BoG and government to look into the enforceability of lending rates and ensure reduced lending rates,” he noted.
Meanwhile, the BoG APR report highlighted wide disparities in lending rates across the banking sector. It showed that Bank of Africa offered the lowest rate of 20.22% for a one-year tenor, while Republic Bank followed with 21.43% for its three-year facility.
The APR, according to the BoG, reflects the true cost of a loan, comprising the Ghana Reference Rate, bank-specific risk premia, and other charges borne by borrowers
