The Institute of Statistical, Social and Economic Research (ISSER) has identified Ghana’s high lending rates as a major hindrance to private sector growth, emphasising the need for targeted interventions to support small and medium-sized enterprises (SMEs).

In its State of the Ghanaian Economy Report 2023 and Q3 2024 Review, ISSER points out that lending rates in Ghana are among the highest in the sub-region, creating significant challenges for businesses looking to expand and contribute to economic development.

“Lending rates remain highest across the sub-region and do not support private sector development,” ISSER states.

It added that high costs of borrowing limit access to essential capital for SMEs and stifle their growth potential.

The report argues that without affordable financing options, many businesses in Ghana struggle to compete, innovate, or even maintain operations.

To address this issue, the report recommends careful implementation of the government’s SME Go program, which aims to offer more affordable credit to small and medium enterprises with an interest rate of 10%.

ISSER stresses that this lower rate is critical to making financing accessible to smaller businesses, which are key drivers of employment and economic activity.

“Government’s SME GO programme should be carefully implemented to address this challenge,” the report notes, suggesting that a well-structured approach could significantly alleviate the financial pressures faced by Ghanaian SMEs.

The report’s findings underscore the importance of sustainable financial policies that support business growth, calling on policymakers to prioritise interest rate reductions and targeted programs like SME Go to foster a more vibrant private sector in Ghana.