The latest Annual Percentage Rates (APRs) released by the Bank of Ghana indicate that tier-one bank, Standard Chartered Bank, offered the least interest rates on loans for both households and enterprises.

It offered rates of between 14 – 42% for households, agriculture and the manufacturing sectors of the economy. 

Households facilities include vehicle loans, mortgage and other consumer credit.

Nigerian banks, Access Bank and UBA followed suit with interest rates of 17.5 – 28% and 18.7 – 31.7% to consumers in the households, agriculture and the manufacturing sectors.

Interestingly, adb, whose primary focus is agriculture, charged a rate of 24.9% for consumers in that sector.

Also, Bank of Africa and UMB offered the most expensive loans with rates of 29.9 – 30.9% and 29.8 – 31.1% for consumers in the household sector. 

For agriculture, NIB and Republic Bank offered the highest interest rate of 34.8% and 33.5 – 34.2% respectively, while NIB, again, and CAL Bank offered the expensive loans at rates of 29.5 – 34.3% and 29%, respectively in the agriculture and manufacturing sectors.

The APR represents the annual rate charged by banks for lending to the public, expressed as a percentage of the yearly cost of funds over the term of the loan.

It includes the interest rate and all other charges applicable against a credit (e.g. insurance fee, processing fee, commitment fee, income foregone on mandatory security deposits, etc.). 

The APR reflects the true cost of borrowings from banks by the public, and it is a linear combination of the Ghana Reference Rate (GRR), risk premium and all other charges. 

The GRR is a reference rate for lending consisting of a weighted average of the Monetary Policy Rate (MPR), Interbank Lending Rate and the 91-day Treasury bill rate1. 

The Ghana Reference Rate stood at 16.1 per cent.

According to the Bank of Ghana’s Summary of Economic and Financial Data for November 2018, average lending rate stood at 24%.