Banks urged to lower lending rates
The Bank of Ghana (BoG) has called on commercial banks to reduce their lending rates further to lower borrowing costs for businesses and households, stimulate private sector activity, and sustain the country’s growth momentum.
Governor of the Bank, Dr Johnson Asiama, made the appeal during a meeting with chief executives of commercial banks in Accra, stressing that the central bank’s successive cuts in the Monetary Policy Rate (MPR) must translate into cheaper credit across the financial system.
According to Dr Asiama, although the BoG has lowered its policy rate by more than six percentage points in recent months, the corresponding decline in average lending rates has been minimal, leaving credit conditions relatively tight for productive sectors of the economy.
“The Monetary Policy Committee voted to cut the policy rate by 350 basis points to support the disinflation process. This is the third rate cut in 2025 and reflects our confidence that inflation will remain within the medium-term target band,” he said.
The Governor noted that while inflationary pressures have eased and macroeconomic stability continues to strengthen, the benefits of this stability must be shared more broadly across the economy, particularly with small and medium enterprises that form the backbone of national growth.
“We are mindful of potential risks such as possible utility tariff adjustments. However, we stand ready to act decisively to preserve stability, and we expect further improvement as banks realign their pricing models,” Dr Asiama noted.
A Call for Inclusive Credit Growth
Dr Asiama emphasised that reducing lending rates would help improve access to credit, stimulate investment, and drive job creation, particularly within the private sector, which accounts for most employment and production in Ghana.
He explained that the central bank’s policy actions are aimed at consolidating the disinflation gains recorded in recent months while ensuring that monetary easing translates into real economic outcomes.
“We believe that a more responsive banking sector will enhance private sector confidence, spur innovation, and strengthen Ghana’s post-recovery growth momentum,” Dr Asiama stated.
Commitment to Financial Stability
The Governor reaffirmed the BoG’s commitment to maintaining a stable macroeconomic environment and to deepening its engagement with financial institutions to enhance credit delivery efficiency.
He acknowledged the progress made by the banking industry since the implementation of regulatory reforms, which have improved liquidity and strengthened capital buffers.
Nonetheless, he urged banks to take a proactive stance in supporting productive sectors such as agriculture, manufacturing, and renewable energy through affordable financing.
Dr Asiama concluded by encouraging banks to adopt more flexible credit models and innovative risk assessment tools that allow viable businesses, especially SMEs, to access funding on fairer terms.
“Our shared goal is to ensure that Ghana’s financial system supports inclusive growth, where lower lending rates translate into new investments, jobs, and opportunities for all Ghanaians,” he added.
