Lending rates drop slightly to 31.10% in June 2024

The average lending rate of banks has slightly decreased to 31.10% in June 2024, down from 31.15% recorded during the same period last year.

According to data from the Bank of Ghana, this decline in borrowing costs aligns with a reduction in the inflation rate.

Starting at 32.94% in January 2024, the average lending rate experienced drops in both February and March, hitting 32.77% and 32.37%, respectively. It continued to ease in April, reaching 31.25%.

As of June 2024, the Ghana Reference Rate was at 29.44%.

On July 26, 2024, the Bank of Ghana’s Monetary Policy Committee decided to keep the policy rate steady at 29.0%. The Central Bank cited uncertainties about the inflation outlook for the year, influenced by recent exchange rate pressures, increased utility tariffs, and rising ex-pump fuel prices.

However, lending rates can vary significantly among banks and the sectors they serve. While some banks offer loans at the Ghana Reference Rate, others may charge rates as high as 40%, depending on the customer’s risk profile.

Meanwhile, the banking sector’s performance in the first half of the year points to a continuous recovery from the impact of the Domestic Debt Exchange Program.

Total assets grew by 33.3% to GHS 323.1 billion at the end of June 2024, relative to the 21.2% growth recorded at the end of June 2023.

However, the industry’s Non-Performing Loan ratio increased to 24% in June 2024 from 18.7% the previous year.

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