Average lending rate continued to remain in the 20% range for almost the whole of this year, the Bank of Ghana's Summary of Economic and Financial Data has revealed.

According to data from the Central Bank, it stood at 20.34 in October 2021, the second lowest so far this year.

For August 2021 and September 2021, average lending rate were pegged at 20.51% and 20.23% respectively. It began the year with cost of credit of 20.97% and 20.96% in January and February 2021 respectively.

Importantly, average cost of borrowing has remained slightly lower than what was recorded last year. It stood at a little above 21% for the entire of 2020, but far lower than the about 29% registered some five years ago.

The Bank of Ghana has been credited for some important policies that have driven cost of credit down significantly.

But the average lending rate varies among the banks. It also depend on the type of customer, the risk exposure and the sector the retail or institutional customer operates.

For instance, some banks might lend at a lower rate of about 16% to a customer considered as credit worthy, who will not default in repaying the loan.

Others might also offer rates far higher than the average rate because the client might be a first time borrower or considered highly risky.

In March 2020, average cost of credit was estimated at about 23%, but took a nose dive to about 21.95% in June 2020. It has since been declining.