GUTA Calls for Single-Digit Lending Rates, Warns High Interest is Strangling Businesses

GUTA Calls for Single-Digit Lending Rates, Warns High Interest is Strangling Businesses

The Ghana Union of Traders Association (GUTA) is urging a drastic reduction in lending rates to single digits, highlighting that the current high cost of credit is crippling businesses and stifling private sector growth.

In a recent meeting with the Minority in Parliament, GUTA President Clement Boateng stressed that despite the Bank of Ghana’s policy rate being reduced to 14%, commercial banks are still charging interest rates above 20%, with some reaching as high as 22 to 24%.

“While the policy rate has dropped, we’re not seeing a corresponding reduction in lending rates, and that’s placing immense pressure on businesses, many of which depend on credit to survive and grow,” Mr. Boateng said. “The situation is unsustainable, especially when businesses are already dealing with rising operational costs.”

He further pointed out that countries like Côte d’Ivoire and Senegal are offering single-digit lending rates, making credit more accessible to businesses, and questioned why Ghana, the second-largest economy in the West African region, is lagging behind with double-digit rates.

Mr. Boateng called on the Bank of Ghana to take stronger regulatory action, ensuring that reductions in the policy rate are mirrored in commercial lending rates.

He also emphasized the crucial role of affordable credit in job creation, as the private sector is the country’s largest employer. “For businesses to expand and create jobs, they need access to affordable capital,” he concluded.

Story:Efua Nessa
Source :Loco tv