The Chamber of Young Entrepreneurs has warned that Ghana’s cost of credit, despite wide variations among banks, is stifling business expansion, trade competitiveness, and the country’s entrepreneurial spirit.
The June 2025 Annualized Percentage Report (APR) published by the Bank of Ghana (BoG) showed that the cost of credit to Small and Medium Scale Enterprises (SMEs), irrespective of the during or tenor, ranges from as low as 17% to as high as 46%.
The APR does not include only the lending rate but other bank charges such as processing fees, insurance, premiums, and others, summing up to the true cost of the loan.
Reacting to the report, the Chamber’s CEO, Sherif Ghali, said the figures reveal a troubling reality that while some banks offer loans at relatively lower rates, the prevailing market environment still leaves most young entrepreneurs priced out of credit.
For young entrepreneurs without collateral or long credit histories, access to the lowest rates remains elusive, pushing them towards more expensive facilities or leaving them without financing altogether.
“For me, it is so high and high borrowing capital eats into working capital, suppressing expansion, especially the people I lead who are young. If the first option to get funding is traditional banks, and they are offering rates this high, it is not good. This does not augur well for encouraging an entrepreneurial economy,” he said interview monitored by The High Street Journal.
According to Ghali, the impact is felt in suppressed business expansion, inability to scale, and a weakening of Ghana’s competitiveness in regional and global markets. He added that the situation is particularly harsh for start-ups in sectors that require significant upfront capital investment.
The Chamber is now calling on the Bank of Ghana and the government to review the enforceability of lending rate caps and explore measures to bring down borrowing costs.
They argue that without affordable credit, the government’s push for entrepreneurship and SME growth will remain aspirational rather than achievable.
“Ghana’s rate is not healthy for expansion and trade. We cannot compete. This is a call for BoG and government to look into the enforceability of lending rates and ensure reduced lending rates,” he pleaded.
Economists and analysts say the challenge lies in balancing the need to control inflation with the need to stimulate growth. With inflation trending down in recent months and the policy rate stabilising, they believe there may be room for targeted interventions to ease credit costs for SMEs without destabilising the macroeconomic environment.
The Chamber of Young Entrepreneurs says an affordable cost of credit is their core means of survival, and hence, the government, with urgency, must move to address the situation.
