Falling inflation: BoG appeals to banks to cut lending rates

The Bank of Ghana is appealing to commercial banks to cut lending rates since the county’s macro economy such as inflation continues to improve in performance.

According to Second Deputy Governor of the Bank of Ghana, Elsie Addo Awadzi, inflation has dropped consistently since the beginning of the year to 41.2%, showing signs of improvement in the economy.

The Deputy Governor was speaking at the launch of a collaboration between Absa Bank and Mastercard Foundation to provide loans to small-scale businesses at 10%.

She therefore encouraged the banks to lend more to the private sector to support growth as the sector has become more liquid and capable of withstanding the storm of the economic challenges.

“As the economy picks up and there is a signal of improvement in the macro economy, we expect things to get better. Moments ago before I got here, inflation has dropped to 41.2% for April [2023], from the about 50% some months ago”.

“We as a regulator and at the Monetary Policy Committee project that things will improve. Inflation rate will drop further and lending rates will come down. I, therefore, encouraged you all as banks to emulate Absa Bank and bring the lending rates down further”, she pointed out.

Furthermore, she said the Small and Micro Enterprises are the backbone of the economy “and especially with the Africa Continental Free Trade Agreement onboard, I want to see more lending to the sector at lower rates so that these Ghanaian businesses can be very competitive”.

Country Manager for Mastercard Foundation, Rossy Fynn used the occasion to announce plans by the foundation to introduce innovative products to support small businesses especially those on sustainable and green initiatives.

Managing Director for Absa Bank, Abena Osei Opoku assured that the bank will remain the best choice for SME lending.

She also indicated that the plan for the SME loan at 10% is to reach out to more than 5,000 small businesses and make them investor ready.

The Absa SME loan is a low rate special offer at 10% for women owned businesses and SMEs.

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