Banks’ lending to Ghana’s private sector climbed to a record GH¢103 billion in October 2025, marking a strong finish to the year and signaling renewed confidence among both businesses and lenders. The increase, driven largely by falling interest rates, has created a positive platform for economic activity in 2026, according to data from the Ghana Association of Banks.
At the start of 2025, private sector credit stood at GH¢93.6 billion in January and remained fairly stable through March. Momentum slowed in the second quarter as higher borrowing costs and cautious business sentiment pushed lending down to a low of GH¢86.9 billion in May.
The trend reversed in the second half of the year. By September, credit had crossed the GH¢100 billion mark, rising further to GH¢103.1 billion in October. This represents about a 10 percent increase from January levels and an 18 percent rebound from the May low, highlighting a strong late-year recovery in business activity.
Lower lending rates played a central role in this turnaround. Average rates opened 2025 at 30.1 percent, dipped below 30 percent by March, and continued to ease throughout the year. They fell to 27.4 percent in April, 26.6 percent in July, and dropped sharply to 22.7 percent by September, where they remained in October. This is a major improvement from 32.9 percent in January 2024, making credit more affordable across the economy.
The Services sector attracted the largest share of the new lending, with credit rising to GH¢38.0 billion in October from GH¢31.4 billion in January. Manufacturing, import trade, and agriculture, forestry and fishing also saw strong growth, showing that businesses are increasingly using credit to expand, modernize, and raise production.
While the figures point to strong momentum, analysts caution that growth will depend on how effectively firms turn new borrowing into productive investment. Excessive debt could weaken the gains if not carefully managed.
Still, the mix of record-high credit levels and falling interest rates gives Ghana’s private sector a solid boost as it heads into 2026. The key challenge now is to ensure that rising credit translates into real economic growth and job creation, rather than short-term borrowing without lasting impact.
