Banks have money but businesses can't access loans – AGI

The Association of Ghana Industries (AGI) has raised concerns over the difficulties businesses face in accessing bank loans despite falling interest rates and increased liquidity in the banking sector.

Chairman of the AGI's Economic Affairs Committee, Eric Defor, says some banks are demanding collateral worth nearly 120% of the amount businesses seek to borrow, making it difficult for companies to secure funding to expand their operations.

Speaking on JoyNews on Wednesday, November 11, 2026, Defor said that although interest rates have declined, access to credit remains a major challenge for businesses.

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“Collateralisation is also another problem which is still in the market. If my memory serves me right, they are now asking for almost about 120 per cent of the amount you want to borrow,” he said.

He explained that banks currently have sufficient funds to lend, partly due to the government's continued repayment of debts under the Domestic Debt Exchange Programme (DDEP).

“The banks are awash with money now,” he said.

However, he questioned why businesses continue to struggle to access loans despite the availability of funds and the decline in lending rates.

Bank of Ghana data show that the average lending rate fell from 24.15% to 15.94%, while the policy rate declined from 25% to 14% over the same period.

Credit to the private sector also increased by 35.5% to GH¢123.3 billion, but Defor questioned which sectors of the economy were benefiting from the increase.

He suggested that some banks could be investing their funds in government securities rather than lending to businesses, while acknowledging that lenders remain cautious following the country's financial crisis.

Defor also called for reliable data on how banks distribute loans across different sectors to provide a clearer picture of the challenges businesses face in accessing credit.

While praising the government's VAT reforms for reducing production costs, he urged the government to pay greater attention to the financing needs of businesses.

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His concerns come ahead of the presentation of the 2027 Budget by Finance Minister Dr Cassiel Ato Forson at 6 p.m. on Thursday, November 12, with businesses hoping for measures to improve access to affordable credit and support economic growth.

DR/MA

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