A widening gap between benchmark interest rates and actual lending costs is raising fresh concerns about credit access in Ghana, even as monetary conditions improve significantly.
Latest data from the Bank of Ghana shows the average lending rate declined to 19.7% in February 2026, down sharply from 30.12% a year earlier. Yet, the pace of reduction is lagging behind expectations, especially in the face of aggressive easing in key policy indicators.
At the center of the disconnect is the Ghana Reference Rate, which has dropped dramatically to 14.58% from 29.96% over the same period—signaling a much faster improvement in underlying monetary conditions than reflected in commercial bank lending.
Transmission gap widens
The Bank of Ghana’s policy easing, including a cut in the policy rate to 15.50% in January 2026, was expected to trigger a faster decline in borrowing costs. Instead, lending rates have remained stubbornly high, hovering close to 20%.
This sluggish transmission suggests that banks are not fully passing on the benefits of lower funding costs to customers, creating a bottleneck in credit expansion.
Uneven credit landscape
Beyond the headline figures, Ghana’s lending market remains highly fragmented. While some banks offer relatively competitive rates close to the benchmark, others continue to price loans as high as 28%, depending on risk exposure.
This disparity reflects deeper structural issues, including high operational costs, cautious risk appetite, and the lingering impact of non-performing loans on bank balance sheets.
As a result, access to affordable credit remains uneven, with only top-tier borrowers benefiting from improved conditions.
Limited relief for businesses and households
For businesses—particularly small and medium-sized enterprises—the marginal drop in lending rates offers little immediate relief. Borrowing at nearly 20% continues to constrain expansion, investment, and job creation.
Similarly, households seeking personal loans or mortgages still face high repayment burdens, limiting demand for credit despite improving macroeconomic indicators such as lower inflation and exchange rate stability.
Outlook
Although the direction of interest rates is downward, the pace of change suggests Ghana’s credit market is still in transition.
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Sustained macroeconomic stability, further policy easing, and improved banking sector efficiency will be critical to closing the gap between benchmark rates and actual lending costs.
Until then, the promise of cheaper credit may remain out of reach for many, even as headline indicators point to a more favorable financial environment.
