In a recent report from the Bank of Ghana, data has surfaced revealing a significant surge in the average lending rate, reaching an alarming 32.69% in October 2023.
This translates to an average monthly interest rate of 2.724% imposed by banks on loans.
Interestingly, the lending landscape has witnessed some notable fluctuations throughout the year.
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The November 2023 Summary of Economic and Financial Data discloses that the average lending rate witnessed a decline from March to May 2023, maintaining a range within the 31% bracket until September 2023.
From a peak of 36.64% in February 2023, the average lending rate experienced a modest dip to 35.87% in March 2023.
April and May saw a more significant decrease, reaching 31.66% and 30.94%, respectively, only to witness a slight uptick to 31.5% in June 2023.
It’s worth noting that the Ghana Reference Rate held steady at 31.09% in October 2023, offering a benchmark against the fluctuating lending rates.
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Looking ahead, the Monetary Policy Committee of the Bank of Ghana is poised to announce crucial developments in the economy, including a pivotal decision on the Policy Rate scheduled for November 27, 2023.
Anticipation looms, with some bank chiefs and analysts expecting a stable policy rate for the next two and a half months.
Notably, the lending landscape is diverse, with average rates varying among banks and the sectors they cater to. While some banks align their rates with the Ghana Reference Rate, others charge exorbitant rates, reaching as high as 40%.
The determining factor appears to be the risk profile of the customers involved.
