Borrowers from Ghana's universal banks are experiencing the benefits of lower interest rates more quickly than customers of community and microfinance banks. This key finding comes from a survey presented at the third Post-Monetary Policy Committee (Post-MPC) Policy Seminar of the Chartered Institute of Bankers, Ghana (CIB Ghana).
The survey indicates a significant disparity in how monetary policy changes, such as adjustments to the policy rate, are passed on to different types of borrowers. While universal banks reported lending rates between 10 and 15 per cent, community banks often charged 21 to 25 per cent. Microfinance institutions quoted even higher rates, typically ranging from 31 to 40 per cent.
This uneven transmission of monetary policy has broad implications for Ghana's economic growth and financial inclusion. Small and medium-sized enterprises (SMEs), which often rely on community and microfinance banks, face higher borrowing costs. This can hinder their ability to invest, expand, and create jobs, despite the central bank's efforts to stimulate the economy through its policy rate decisions. The Bank of Ghana's Monetary Policy Committee (MPC) had kept the policy rate unchanged at 14.0 per cent on 24 September 2026.
Dr. Ellen Ohene-Afoakwa, President of the CIB Ghana Governing Council, emphasised that monetary policy affects more than just economists. She stated its effectiveness depends on how changes are passed on to the wider economy. Dr. Ohene-Afoakwa highlighted the need for a banking sector that provides adequate credit to productive sectors. This must be balanced with strong risk management and responsible lending practices.
The Bank of Ghana Governor, Dr. Johnson P. Asiama, whose remarks were read by Dr. Simon Harvey, acknowledged that policy rate changes do not reach borrowers instantly. He explained that banks consider funding costs, credit risk, operating costs, and expected losses when setting loan prices. The Governor stressed that the aim of monetary policy extends beyond lower interest rates. It also seeks to anchor inflation expectations, maintain a stable currency, and ensure sound financial institutions.
Mr. Robert Dzato, CEO of CIB Ghana, presented the survey findings. He noted a strong appetite among banks to lend. However, he confirmed that the impact of monetary policy transmission varied significantly across market segments. The survey also revealed that 65 per cent of respondents expressed high confidence in the macroeconomic environment. Furthermore, 80 per cent considered the current policy stance effective in containing inflation. A majority, 86 per cent, expected the MPC to hold the policy rate, which it did.
Despite this confidence, 70 per cent of banks expect inflation to rise over the next three months. This indicates an upside risk to price stability. On asset quality, 71 per cent of banks are confident of meeting the 10 per cent Non-Performing Loan (NPL) directive by the end of 2026. Mr. Dzato cautioned that faster credit growth must be matched by stronger monitoring, recovery, and risk mitigation. Preventing bad loans is crucial to avoid future problems for the banking sector. This comprehensive approach ensures that credit expansion supports sustainable economic development.