According to the Summary of Economic and Financial Data by the Bank of Ghana (BoG), this is the lowest in over 12 years.
This is compared with 23.06% in January 2020, 23.37% in February 2020, and 23.40% in March 2020.
This average lending rate has been described by many analysts as a good sign in the future. The major concerns, however, will be access to credit by consumers.
Interest charged by Savings and Loans Companies as well as Micro Finance Companies are expected to reduce the default rate among borrowers.
In February, the BoG reduced its Policy Rate by 150 points to 14.50%. The Central Bank further introduced other measures including the reduction in the primary reserves from 10% to 8% to enable support of the real sector of the economy amidst the COVID-19 pandemic.
Though it maintained the rate at 14.5% on Friday, the cost of borrowing has reduced slightly.
The March 2020 Banking Sector Report, the February 2020 credit conditions showed that banks reported net tightening in the overall credit stance on loans to enterprises, except SME loans, with the likelihood of further tightening two months ahead.
Banks’ similarly expected net tightening of the credit stance on loans to households in the outlook, even though the credit stance on household loans eased during the first two months of 2020.
The survey also pointed to a decline in the overall demand for credit by enterprises, emanating from all sub-components of loans except short-term loans.