Ghanaian traders have clashed with bankers and other financial institutions on their lending rates which they have described as abnormally high.
The Ghana Union of Traders’ Associations (GUTA) has over the years complained bitterly about commercial banks over what it describes as hidden and inconsistent lending rates that continue to cripple businesses.
The Association expressed alarm that the real cost of borrowing in Ghana remains far higher than the figures the banks and their regulators often publish, further urging the Bank of Ghana to act decisively to address what it describes as unfair risk pricing by commercial banks.
“Bank of Ghana has to come in and regulated again. When they talk about risk, you talk about the Ivory Coast having 7 percent, whereas Ghana’s is 21 percent. It is because they do proper due diligence,” Dr Joseph Obeng explained in a television discussion raising concerns about the widening gap between official lending rates and what traders actually face.
“He’s saying that the policy rate averages around 19 to 20 per cent. I’m going to hold him to that. I’ll do this research from the traders and bring this report because most of them say it’s around 25 per cent even at this time,” he said.
“If you say it’s 19, then the person out there might think their bank is taking advantage of them. Let’s publish these things so we can use them as a reference to bargain; otherwise, this thing is killing traders.”
Call for Women’s Bank
Dr Obeng has therefore called for the immediate establishment of the Women’s Bank promised by the government, warning that many small women-led businesses are collapsing under unbearable borrowing costs.
“Most of our women’s businesses are collapsing, always saddled in debt because the rate of borrowing at the microfinance level is so extensively high,” he said.
“By the turn of the year, they haven’t even paid half of the principal, and the debt is still accumulating. That’s why the Women’s Bank that the President has promised must be put in place, because our women folks are very important.”
He stressed that many women traders operate outside the mainstream banking system. “Most of them do not deal with the banks. They deal with susu people and microfinance, and it’s very worrying,” he added.
Consequently, the Minister of Finance, Dr Cassiel Ato Forson, during the presentation of the the 2026 budget announced that the much-anticipated Women’s Development Bank will be officially established early next year, aiming to enhance access to affordable financing for women entrepreneurs and small businesses across Ghana.
GUTA blames banks for poor risk management
Dr. Obeng accused some banks of poor risk management and internal corruption, saying they often push the cost of their inefficiencies onto responsible borrowers.
“When they talk about risk, you talk about the Ivory Coast having 7% whereas Ghana’s is 21%. It is because they do proper due diligence,” he argued.
“Sometimes the corruption in the banks itself, when they do not do the necessary due diligence and corrupt themselves by even going for some non-existing collateral… they put all these things together and then spread it across the good and bad borrowers, which is very bad.”
He insisted the Bank of Ghana must step in to enforce stricter oversight on how banks determine lending spreads.
“At least, if you think that we can do good for us, then let’s publish and let’s know,” he said. “Because if I’m doing well, then you don’t spread your risk and then put it apart for all of us to pay. That’s what the banks do.
“And the Bank of Ghana has to do something seriously about this, because it shouldn’t be said that inflation has come this low, and so the interest rate is high.”
But commercial banks blame lending crisis on deep structural failures
Meanwhile, Chief Executive of the Ghana Association of Banks, John Awuah, says the challenges in Ghana’s lending system reflect the character of the country and deep structural deficiencies that extend far beyond the banks themselves, thereby rejecting the claim that the issue was simply about due diligence or corruption within banks.
He said Ghana’s high lending rates reflect deep structural weaknesses in the economy.
“Half of the banks operating in Ghana are also operating in Côte d’Ivoire,” he said. “The same bank that lends cheaper there faces structural bottlenecks here — from the Lands Commission to the court system to credit culture.”
Mr Awuah added that Ghana’s banking system lacks a comprehensive credit tracking mechanism. “If Mr Obeng approaches a bank to borrow GH¢100,000, all the bank could do is ask where else he has exposure. It’s word of mouth,” he explained.
“There is no mechanism for a 360 view of the customer. So the bank gives GH¢100,000 thinking it’s for goods, but part goes to pay suppliers, rent, or arrears. By the time you realise, what you funded is gone. Where is he going to get the money to pay you back?”
By Adnan Adams
