The Association of Ghana Industries (AGI) has warned that persistently high interest rates are suffocating small and medium-sized enterprises (SMEs), calling for urgent structural reforms in Ghana’s credit system to restore business confidence.
Chief Executive Officer of AGI, Seth Twum-Akwaboah, said businesses are being unfairly penalized by the inefficiencies of the financial sector, where non-performing loans have pushed banks to increase lending rates, leaving productive enterprises struggling to expand.
“Enterprises that are performing should not have to pay the price for those who default,” he said during a panel session at the launch of National ICT Week. “Banks end up increasing interest rates to cover their losses, and this hurts compliant borrowers and undermines competitiveness.”
To address the challenge, Mr. Twum-Akwaboah proposed the establishment of credit reference bureaus and a collateral registry to improve transparency in lending, enhance credit risk assessment, and support efficient loan recovery. He also emphasized the need for SMEs to adopt digital systems that can make their operations more visible, trackable, and attractive to lenders.
Beyond reforms in credit systems, the AGI boss advocated for stronger public-private partnerships to expand Ghana’s digital infrastructure, which he argued is vital for business transformation and scaling.
The concerns come at a time when businesses are grappling with borrowing costs that remain among the highest in the sub-region. Many firms cite expensive credit as a key obstacle to growth, investment, and job creation.
Meanwhile, the Governor of the Bank of Ghana, Dr. Johnson Asiama, has expressed optimism that lending rates will soon decline, hinting that ongoing monetary policy reforms and efforts to stabilize inflation and the cedi could push interest rates to single digits before the end of his tenure.
For Ghanaian entrepreneurs, however, patience is wearing thin. “We need solutions that ensure only non-performing borrowers face the consequences of default,” Mr. Twum-Akwaboah stressed. “Otherwise, businesses that are doing everything right will continue to suffer under the weight of high capital costs.”
