Ghana’s economic recovery is facing an uncomfortable contradiction. Interest rates are falling sharply, inflationary pressures are easing, and the central bank has signaled a clear commitment to stimulate growth.
Yet for many businesses across the country, particularly small and medium sized enterprises, accessing credit remains painfully difficult.
At a high level engagement in Accra between the Ghana Association of Banks and the Ghana National Chamber of Commerce and Industry, business leaders delivered a blunt message to lenders. Lower policy rates mean little if banks are unwilling to extend credit to the real sector.
Policy Rate Slashed, But Lending Still Tight
Over the past six months, the Bank of Ghana has taken bold steps to ease monetary conditions. The benchmark policy rate has dropped significantly, while the Ghana Reference Rate has also declined sharply. On paper, this should translate into cheaper loans and renewed momentum for businesses seeking to expand, retool or stabilize operations.
However, many SMEs say the reality on the ground tells a different story. Manufacturers and value addition enterprises report that loan approvals remain slow, documentation requirements frequently change, and collateral demands remain steep. For some businesses, waiting over a year for credit approval has become a frustrating norm rather than an exception.
The meeting in Accra exposed this disconnect between monetary policy and practical access to finance. Business owners argue that without improved credit flow, rate cuts alone cannot revive economic activity.
The NPL Burden Weighs Heavy
Bank executives, however, insist that their caution is not without reason. According to industry data, Ghana’s non performing loan ratio remains around 19 percent, one of the highest in the West African sub region. This means that for every one hundred cedis lent, nearly nineteen cedis are at risk of not being repaid.
The President of the Ghana Association of Banks, John Awuah, was candid about the challenge. He noted that weak credit culture and widespread defaults across households and businesses have forced banks into a defensive position. Protecting depositors’ funds, he stressed, must remain the priority.
From the banks’ perspective, aggressive lending in a high default environment could threaten financial stability. Even with lower policy rates, credit risk does not automatically disappear. As a result, many institutions are prioritizing risk management over rapid loan expansion.
Businesses Push Back
On the other side of the debate, the Ghana National Chamber of Commerce and Industry argues that the burden of the non performing loan problem cannot rest solely on borrowers.
Chamber President Stephane Miezan emphasized that many viable businesses are being locked out of the credit market. He pointed to collateral requirements that can reach 120 percent of loan values, lengthy approval timelines of up to 18 months, and high rejection rates.
“If money becomes cheaper and businesses cannot access it, then it is equally expensive,” he said during the discussions.
For many entrepreneurs, especially in manufacturing, time is critical. Delayed financing can mean missed contracts, stalled expansion plans, and lost jobs. In such circumstances, falling benchmark rates offer little practical relief.
Clarifying the Collateral Question
One of the most contentious issues raised was the 120 percent collateral requirement. Awuah clarified that this threshold is rooted in regulatory provisions under Ghanaian law and not simply a discretionary policy of individual banks. He suggested that more public education is needed to clarify this distinction.
He also encouraged businesses to explore alternative funding sources such as green finance facilities, which often carry more competitive rates. With growing global emphasis on sustainability, such financing channels may offer new opportunities for enterprises willing to adapt.
Still, for many SMEs focused on survival rather than sustainability certification, these options may not be immediately accessible.
The Central Bank’s Target
The Bank of Ghana has acknowledged the challenge. At the 128th Monetary Policy Committee press conference in January, Governor Dr Johnson Pandit Asiama confirmed that the sector-wide non performing loan ratio had improved to 18.9 percent in December 2025, down from 21.8 percent the previous year. While the decline signals progress, it remains well above comfortable levels.
The central bank has set an ambitious target of reducing the ratio to 10 percent by December 2026. Achieving this would significantly ease pressure on the banking sector and potentially unlock more aggressive lending.
However, reaching that goal will require stronger credit assessment, improved borrower discipline, and broader financial literacy.
Shared Responsibility for Recovery
Encouragingly, both organizations left the meeting with commitments rather than accusations. The Ghana Association of Banks agreed to forward business recommendations to commercial banks and to strengthen training for credit officers. Better risk assessment and improved communication may help bridge the trust gap.
The Chamber also pledged to intensify financial literacy programmes among its members. Mr. Miezan acknowledged that businesses must take responsibility for meeting their repayment obligations. Lower default rates, he noted, are in the direct interest of enterprises seeking future financing.
Ultimately, Ghana’s recovery depends on restoring confidence on both sides of the credit relationship. Monetary easing alone cannot drive growth if banks remain cautious and businesses remain frustrated. At the same time, sustainable lending cannot occur without a stronger repayment culture.
All in all, the paradox is not far to notice. Interest rates are falling, but many business doors remain closed. Until credit flows more freely to productive sectors, the promise of cheaper money will remain just that, a promise and a mere paperwork.
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