Majority of banks exceed 20% average lending rate
Borrowers of 15 out of the 23 universal banks in the country are paying higher than the average lending rate of 20% on loans, information provided by the Bank of Ghana (BoG), has shown.
Per a release by the central bank, which is meant to promote transparency in the pricing of loans granted by universal banks, borrowers, as of the end of July were paying as much as 24.89% interest on loans instead of the average rate of 20%.
The Agricultural Development Bank Limited gives loans with the highest rate of 24.89%, followed by Absa Bank Ghana Limited, whose interest rate stood at 23.59%.
Other banks whose lending rate outstrip the 20% are Societe General Ghana PLC, 23.61%, Standard Chartered Bank, 20.82% %, GCB Bank Limited, 22.80, and FBNBank (Ghana) Limited, 22.25%.
So far, eight banks have their lending rate less than the 20%.
They are CalBank PLC, 15.97%, Guaranty Trust Bank (Ghana) Limited, 16.97%, Bank of Africa Ghana Limited, 17.19%, and Access Bank Ghana Plc, 17.77%.
The rest are OmniBSIC Bank Ghana Limited, 17.95%, Ecobank Ghana Limited, 18.41%, United Bank for Africa (Ghana) Limited, 19.05%, and Zenith Bank (Ghana) Limited, 19.45%.
The list of lending rates for universal banks is below:
Lending rate experience rise and fall
Since the beginning of the year, the average lending rate has seen some fluctuations, rising at a point in time, and reducing at another instance.
In January, the average lending rate was 20.97% but shot up marginally to 21.02% in February 2021. It, however, reduced 20.96% in March 2021.
Although marginal, from March there has been a slight reduction in the lending rate. In April 2021, it was 20.93% but went down again to 20.85% in May 2021 and then to 20.61% in June 2021.
President Akufo-Addo charges BoG Board to ensure compliance
The information was provided by BoG amid a call by the President, Nana Addo Dankwa Akufo-Addo, for the governing board of the central bank to investigate the high-interest rates charged on loans by commercial banks in the country.
He bemoaned the situation whereby BoG had kept its policy rate at 13.5% but many commercial banks were charging above 21%.
“It’s surely not right that the policy rate stands at 13.5% while commercial banks rate stands at 21% and above, this is a gap we have to break if we are to realise the vision of a Ghanaian economy that is globally competitive,” the president told the governing board.
“I urge the new governing board of the bank to interrogate the issue of high-interest rates in the country and how the problem should be addressed to enhance the competitiveness of the private sector,” he charged them.
Those comments were made by the president when he inaugurated the reconstituted board of the central bank at the Jubilee House on Friday, August 20.