Lower interest rates reaching universal bank borrowers faster than community and microfinance bank customers: CIB Ghana survey

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 24 September 2026 to keep the policy rate unchanged at 14.0 per cent.

Credit growth and credit quality must move together

Opening the seminar, the President of the CIB Ghana Governing Council, Dr Ellen Ohene-Afoakwa, 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 how far those changes were passed on to the wider economy. “As an institute, we recognise that credit growth and credit quality must move together,” she said.

She added that Ghana needed a banking sector able to provide adequate credit to productive sectors while maintaining strong risk management and responsible lending. On NPLs, she said greater attention should go to preventing bad loans than to recovering them after they had deteriorated.

Central bank perspective

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 reach 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.

He said the aim of monetary policy was not simply to achieve lower interest rates but to keep inflation expectations anchored, maintain a stable currency, and ensure sound financial institutions. He also called for a stronger focus on preventing NPLs.

The Governor said the MPC found CIB Ghana’s Pre-MPC survey, which is presented to the Committee ahead of each meeting, insightful, helpful, and complementary to its own analytical models.

What the industry survey found

The Chief Executive Officer of CIB Ghana, Mr Robert Dzato, presented findings from the Institute’s September Pre-MPC sentiment survey, which the CIB Ghana research team conducts among banks ahead of each MPC meeting.

Mr Dzato 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.

Lending rates differed widely by type of bank. Most universal banks surveyed reported lending at 10 to 15 per cent. Among community banks, 46 per cent reported lending at 21 to 25 per cent, up from 36 per cent in the July survey, while microfinance banks reported rates of roughly 31 to 40 per cent.

Other findings from the survey were:

• About 65 per cent of respondents expressed high confidence in the macroeconomic environment.
• About 80 per cent considered the current policy stance effective in containing inflation.
• 86 per cent expected the MPC to hold the policy rate, as it did.
• 70 per cent expect inflation to rise over the next three months.
• 71 per cent of the banks are confident of meeting the 10 per cent NPL directive by the end of 2026.

Although most banks were confident about the wider economy, a majority expected inflation to rise in the coming months, an upside risk that also featured in the panel’s discussion of the MPC’s decision to hold.

On asset quality, Mr Dzato described banks’ confidence in meeting the 10 per cent NPL target 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,” he said, adding that loans not repaid on time could create another problem for the sector.