Robert Dzato and Dr. Ellen Ohene Afoakwa
Lower interest rates are reaching borrowers of Ghana’s universal banks faster than customers of community and microfinance banks, according to a survey of banks presented at the third Post-Monetary Policy Committee (Post-MPC) Policy Seminar of the Chartered Institute of Bankers, Ghana (CIB Ghana).
The seminar, held at the CIB Ghana Auditorium and streamed on the Institute’s social media platforms, brought together the Bank of Ghana (BoG), the Ministry of Finance, banks, traders and industry.
Discussions centred on monetary policy transmission, credit growth and non-performing loans (NPLs).
It followed the 132nd meeting of the BoG’s Monetary Policy Committee (MPC), which voted unanimously on September 24 to keep the policy rate unchanged at 14.0 percent.
Opening the seminar, the President of CIB Ghana Governing Council, Dr. Mrs Ellen Ohene-Afoakwa, FCIB, said monetary policy had implications beyond economists and central bankers, as its effects were transmitted through financial markets, lending conditions, businesses and households.
She said the effectiveness of monetary policy depended not only on changes in the policy rate but also on the extent to which those changes were transmitted to the wider economy.
“As an institute, we recognise that credit growth and credit quality must move together,” she said, adding that Ghana needed a banking sector capable of providing adequate credit to productive sectors while maintaining strong risk management and responsible lending.
On NPLs, she said greater attention should be placed on preventing bad loans than on recovering them after they had deteriorated.
In remarks read on his behalf by the BoG’s Director of Research, Dr. Simon Harvey, the Governor of the Bank of Ghana, Dr. Johnson P. Asiama, said changes in the policy rate do not pass through to borrowers at once, because banks also weigh funding costs, credit risk, operating costs and expected losses when pricing loans.
“This transmission is neither automatic nor instantaneous,” the Governor said, noting that the aim of monetary policy was not simply to achieve lower interest rates but to maintain anchored inflation expectations, a stable currency and sound financial institutions.
He said the MPC found CIB Ghana’s Pre-MPC survey, which is presented to the Committee ahead of each meeting, insightful and complementary to its own analytical models.
Presenting findings from the September Pre-MPC sentiment survey, Chief Executive Officer of CIB Ghana, Robert Dzato, FCIB, said the survey showed strong appetite among banks to lend, although the impact of monetary policy transmission varied across market segments.
“We see appetite to lend is quite high,” he said, noting that “the real impact of the transmission of monetary policy varies across the various segments.”
Lending rates differed widely by type of bank. Most universal banks surveyed reported lending at 10 to 15 percent. Among community banks, 46 percent reported lending at 21 to 25 percent, up from 36 percent in the July survey, while microfinance banks reported rates of roughly 31 to 40 percent.
Although most banks were confident about the wider economy, a majority expected inflation to rise in coming months, an upside risk that also featured in the panel’s discussion of the MPC’s decision to hold.
On asset quality, he described banks’ confidence in meeting the NPL target of 10 percent by year-end as encouraging but warned that faster credit growth had to be matched by stronger monitoring, recovery and risk mitigation.
“We are driving credit growth for obvious reasons,” Mr. Dzato said, adding that loans not repaid on time could create another problem for the sector.
The panel was moderated by Mrs. Ellen Gyamera, ACIB, Head of the Petroleum Fund at the BoG, and comprised Dr. Harvey; Mr. Frederick Amissah, Technical Advisor to the Ministry of Finance; Dr Charles Atuahene, Executive Member of the Finance and Administration Committee of the Association of Ghana Industries; Mr. John Awuah, CEO of the Ghana Association of Banks; and Mr. Clement Boateng, President of the Ghana Union of Traders Association (GUTA).
Dr. Harvey set out the basis for the MPC’s decision to hold, including upside risks to inflation. Mr. Amissah spoke on coordination between fiscal and monetary authorities and the role of fiscal discipline in keeping prices stable and lowering government borrowing costs.
Panellists noted that loan pricing had fallen from past highs and discussed scope for further declines. Mr. Awuah addressed access to credit, documentation borrowers need to qualify, and the role of collateral enforcement and courts in recovering bad loans, drawing comparisons with NPL levels elsewhere in the region.
Mr. Boateng called for repayment terms, including grace periods that reflect traders’ import cycles and shipping delays. Dr. Atuahene discussed how exchange rate movements affect exporters’ competitiveness, input costs and appetite to borrow.
Dr. Ohene-Afoakwa highlighted the Institute’s growth in professional education, certification and ethics, including its Non-Interest Banking Certification, Branch CEO Programme, digital and ESG certifications and Ethics 2.0 class.
She also noted Ghana’s success in winning the right to host the World Conference of Banking Institutes in 2028 and appealed for support for the Institute’s planned modern bankers’ house and business complex.
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