A new survey by KPMG has revealed that credit participation in Ghana continues to remain stubbornly low, not because people do not need loans, but because the system around borrowing has become deeply unattractive.
Although many people confess their need for loans, the credit system is structurally deficient and unattractive, scaring them away.
For many Ghanaians and businesses, access to credit should be a lifeline in difficult times. It is a way to keep a small business running, pay school fees, expand a farm, or manage emergencies.
But according to KPMG’s 2025 West Africa Banking Industry Customer Experience Survey, only 11% of respondents said they applied for and successfully accessed a loan. A striking 86% did not even try. The apprehension comes amid an improving macroeconomic environment. According to KPMG, this lack of participation in the country’s credit system is shaped by bureaucracy, broken trust, and punishing interest rates.
Bureaucracy: When the Process Discourages the Borrower
Prospective borrowers say the journey to secure a loan ends before it truly begins. Complex forms, repeated documentation, unclear requirements, and long waiting periods have turned loan applications into a frustrating ordeal.
As indicated in the findings, one customer cited in the report described how the bureaucratic nature of their bank’s loan process ultimately blocked access to credit. This experience is far from isolated. For small business owners and informal workers, who often lack perfect records or formal collateral, these rigid processes feel designed to exclude rather than support.
This means traders postpone expansion, farmers delay investments, and households abandon plans altogether. The cost of time, effort, and uncertainty simply feels too high.
“One customer, for example, expressed frustration over the bureaucratic and complex loan procedures encountered at their bank, which ultimately hindered access to credit,” the report revealed.
Lack of Trust: The Aftershocks of Economic Turbulence
Years of economic volatility, rising prices, and sharply increasing interest rates have left scars on borrower confidence. Even though inflation has eased and policy rates have started to come down, trust has not recovered at the same pace.
Many Ghanaians remain cautious, unsure whether today’s loan terms might suddenly change tomorrow or whether repayment burdens could spiral out of control. Past experiences, either personal or observed through friends and family, have reinforced fears of default, penalties, and asset seizure.
This lingering mistrust explains why most respondents did not apply for loans at all. For them, avoiding debt feels safer than entering a system they no longer fully believe works in their favour.
High Interest Rates: The Cost That Still Hurts
While headline economic indicators suggest improvement, lending rates tell a different story. Banks, wary of rising non-performing loans after the shocks of the past three years, continue to price in risk aggressively.
As a result, interest rates remain high, making loans expensive and often unviable for households and small businesses. Even when credit is available, the numbers simply do not add up. Monthly repayments can wipe out profits or strain already tight household budgets.
“Although inflation has eased and policy rates have declined, lending rates remain elevated, and banks continue to tighten credit requirements to contain the risk of non-performing loans following the shocks of the past three years,” the report further noted.
A Credit Market Still Out of Reach
The low level of borrowing captured in the KPMG report is a signal that Ghana’s credit market is not yet working for the majority. Bureaucracy shuts people out, lack of trust keeps them away, and high interest rates make loans unattractive even when accessible.
Although macroeconomic conditions are improving, the benefits have yet to filter down to ordinary Ghanaians in a meaningful way. Until borrowing becomes simpler, more transparent, and more affordable, credit will remain a missed opportunity rather than a tool for financial resilience.
