Ghanaian Small and Medium-sized Enterprises (SMEs) faced borrowing costs as high as 33.58% in May 2026. This occurred despite the Ghana Reference Rate remaining stable at 10.03%, according to the latest Bank of Ghana (BoG) Annualised Percentage Rates (APR) report. Many SMEs paid significantly higher rates than the benchmark to access loans from banks, highlighting a persistent challenge for these vital businesses.
The APR reflects the total cost of a loan, including both interest and other charges. The BoG report indicated that the lowest APR for a one-year SME loan was 11.03%, offered by Standard Chartered Bank Ghana Limited. In contrast, Guaranty Trust Bank (Ghana) Limited charged the highest at 33.58% for the same loan type. This wide range in borrowing costs underscores the varied financial landscape for SMEs.
This situation significantly impacts Ghana's broader economic narrative, where SMEs are the backbone of the economy. They account for approximately 92% of all businesses and contribute nearly 70% of the Gross Domestic Product (GDP). High borrowing costs impede their ability to expand operations, purchase essential equipment, and create new jobs, thereby stifling overall economic growth and development.
The Bank of Ghana noted that differences in lending rates among banks are influenced by factors such as risk assessment and other charges applied to loans. The report further indicated that the average APR across all loan categories stood at 17.64%, well above the Ghana Reference Rate of 10.03%. This disparity suggests that while the central bank maintains a stable reference rate, commercial banks apply their own risk premiums and administrative costs.
Business operators have consistently complained that high lending rates make it difficult for them to thrive. The BoG publishes its APR report monthly to promote transparency in lending practices. This initiative aims to help borrowers compare loan costs across different banks before making financial decisions. Increased transparency is crucial for fostering a more competitive lending environment.
Moving forward, policymakers and financial institutions will need to address these high borrowing costs to unlock the full potential of the SME sector. A more accessible and affordable credit market could stimulate investment, foster innovation, and accelerate job creation. The government may explore targeted interventions or credit guarantee schemes to mitigate the risks perceived by banks when lending to SMEs. This would ensure that the stable reference rate translates into more favourable lending conditions for businesses.
The persistent gap between the Ghana Reference Rate and actual SME borrowing costs remains a critical area for economic reform. Stakeholders will closely monitor future BoG reports for any shifts in lending patterns or average APRs. Addressing this issue is essential for Ghana to achieve its economic development goals and support its entrepreneurial ecosystem effectively.