Average lending rates fall marginally to 21.02%

Average lending rates have fallen once again but marginally, data from the Bank of Ghana has revealed.

It is presently ranging between 20 and 21% bracket though have witnessed a significant drop in the last four years.

The end-year average lending for 2020 was 21.10%.

According to figures from the Bank of Ghana, cost of loans have eased significantly since March 2017, going down by about 10%.

A year ago, cost of credit was estimated at about 23%, but has since taken a nose dive to about 21%. Though marginal, it is a welcoming since 2.0 percentage points drop is considered as relatively expensive.

The cost of loans however varies among the commercial banks.

For instance, some banks will offer loans as low as 17 percent per annum, whilst others charge rates as high as 27 percent. In all, that will depend on the risk profile of the customers.

Irrespective of this, some businesses and households consumers want a further fall in lending rates, to conform to rates in the Sub Saharan Africa region.

Many, however have commended the Central Bank, headed by Dr. Ernest Addison, for its impressive policies that have ease the cost of credit in the country.

But the concern is about the fiscal management of the economy, which is very crucial because of its rippling effect on the monetary economy.

Treasury bill rates fall

In a related development, Treasury bill rates have fallen though marginally to about 13%.  

For instance, yield on 91-day Treasury bill has fallen by 0.54% in February 2020 to 13.55%.

Also, interest on the 182-day T-Bill has dropped by 0.14% to14.00% in February 2020. Fitch Solutions, research arm of ratings agency, Fitch, earlier forecast an ease in interest rates in the country, from this  year.It linked that to a further fall in the country’s inflation rate, which then will remain in the single digit bracket. It is projecting an end-year inflation of 8.5% for 2021.



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