The average commercial bank lending rate rose to 21.6% in April 2022 from 20.57% in March 2022, the Bank of Ghana has revealed.
This equates to 1.8% loan interest per month.
However, the average lending rate varies across banks and respective industries.
For example, some banks offer loans as low as 17% per annum, while others charge rates as high as 29%. Overall, this will depend on the risk profile of the clients.
Again, some perceive lending to the agriculture and construction sectors as riskier and therefore lending to these sectors is expensive.
According to the BoG’s economic and financial data summary, the cost of lending has increased, but slightly due to the increase in the inflation rate and other factors.
It fell from 20.16% in January 2022 to 20.52% in February 2022.
But the average lending rate fluctuated in the first quarter of the year, then fell consecutively until December 2021.
In January 2021, the average lending rate stood at 20.97%, but increased slightly to 21.02% in February 2021, then fell to 20.96% in March 2021. After that, it steadily fell to 20.04% in December 2021, then increased in January 2022. .
But with the expected increase in the policy rate from its current 17%, the lending rate is expected to increase further.
The Bank of Ghana, however, hopes that the monetary policy measures to be announced on Monday, May 23, 2022 will help bring down the rising rate of inflation and hence reduce the cost of borrowing in the future.