Policy think-tank, Centre for Economic and Business Research (CEBRE), is urging the Bank of Ghana (BoG) to prevail on commercial banks to reduce lending rates.

The think tank believes interest rate cap will consequently bring down the cost of borrowing and encourage businesses to expand.

Executive Director, Gordon Newlove Asamoah, said capping the lending rates will reduce non-performing loans at commercial banks.

They set the official policy rate which is used to manage lending rate, inflation and the country's exchange rate – and ensure that this rate takes effect through a variety of policy mechanisms.

In less than two years, the Bank of Ghana has managed to reduce the policy rate from 26 per cent in November 2016 to 17 per cent in May 2018.

However, the banks are yet to react with the corresponding drop in lending rates.

Businesses are still accessing loans at very high-interest rates making the cost of doing business very costly which in turn makes Ghanaian businesses non-competitive.

Chairman for the Association of Ghana Industries (AGI), Afua Gyamfua Owusu Achiaw, has said industries will need a specialised package and arrangement with the interest rate to encourage local businesses.