Lower lending rates are reaching borrowers of universal banks faster than customers of community and microfinance banks, highlighting uneven transmission of monetary policy across Ghana’s banking sector.
The findings by the Chartered Institute of Bankers, Ghana (CIB Ghana) show that borrowing costs remain significantly higher for customers of smaller financial institutions despite easing monetary conditions.
The findings were presented at the Institute’s third Post-Monetary Policy Committee (Post-MPC) Policy Seminar, which examined monetary policy transmission, credit growth and non-performing loans (NPLs).
The seminar brought together representatives of the Bank of Ghana (BoG), the Ministry of Finance, banks, traders and industry stakeholders.
Dr Simon Harvey, Director of Research at the BoG, said changes in the policy rate did not immediately translate into lower lending rates because banks considered their funding costs, credit risks, operating expenses and expected loan losses when pricing credit.
He said monetary policy transmission was neither automatic nor instantaneous, although it remained important for anchoring inflation expectations, maintaining currency stability and safeguarding financial sector soundness.
The findings followed the BoG’s 132nd Monetary Policy Committee meeting, which voted unanimously on September 24, 2026, to maintain the policy rate at 14 percent.
Robert Dzato, Chief Executive Officer of CIB Ghana, said the Institute’s September Pre-MPC sentiment survey, conducted among banks ahead of MPC meetings, showed a strong appetite for lending, although the impact of monetary policy differed across market segments.
He said most universal banks surveyed reported lending rates between 10 and 15 percent, while 46 percent of community banks charged between 21 and 25 percent, compared with 36 percent in July.
Microfinance banks reported lending rates of between 31 and 40 per cent, underscoring the high cost of credit facing borrowers who depend on smaller financial institutions.
The differences suggest that improvements in the monetary policy environment may not translate into comparable reductions in borrowing costs for businesses and households across the financial system.
For small businesses that rely on community and microfinance institutions for working capital, persistently high lending rates could constrain access to affordable credit, even as universal bank customers begin to benefit from lower borrowing costs.
The survey also showed that 65 percent of respondents had high confidence in the macroeconomic environment, while 80 percent considered the prevailing monetary policy stance effective in containing inflation.
Although 86 percent of respondents expected the MPC to maintain the policy rate, 70 percent anticipated an increase in inflation over the following three months.
On credit quality, Dzato said 71 percent of the banks surveyed were confident of meeting the directive to reduce NPLs to 10 percent by the end of 2026.
He, however, cautioned that credit expansion needed to be supported by stronger loan monitoring, recovery mechanisms and risk management to prevent deterioration in banks’ asset quality.
Dr Mrs Ellen Ohene-Afoakwa, President of the CIB Ghana Governing Council, said the effectiveness of monetary policy depended on how changes in the policy rate were transmitted to financial markets, businesses and households.
She said banks needed to expand credit to productive sectors while maintaining sound risk management and responsible lending practices.
On NPLs, she called for greater emphasis on preventing loan defaults rather than relying on recovery measures after loans had deteriorated.
Dr Ohene-Afoakwa also highlighted the Institute’s professional education and certification programmes in non-interest banking, digital banking and environmental, social and governance practices.
She said Ghana had secured the right to host the World Conference of Banking Institutes in 2028, with the seminar forming part of activities leading up to the annual Bankers Week.
