AGI says collateral worth 120% of loans blocks firms from credit despite falling rates.

Published 12 Nov 2026, 06:46 GMT

2 min read

Bank of Ghana head office in Accra — Bank of Ghana head office, Accra (file photo)

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Businesses are being shut out of bank credit by collateral demands worth about 120 per cent of the loan, the Association of Ghana Industries (AGI) says.

Eric Defor, who chairs the AGI's Economic Affairs Committee, said some lenders were demanding collateral worth almost 120 per cent of the loan applied for. He was speaking on JoyNews' PM Express on Wednesday, as average lending rates have fallen to 15.9 per cent.

"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.

Mr Defor said banks were liquid, helped by the government's continued repayment of debts under the Domestic Debt Exchange Programme. "The banks are awash with money now," he said.

But he said the funds were not reaching businesses on affordable terms.

"Access is not very easy. I know that they have money because the government has been able to keep the repayment of the DDEP debts going."

"So the banks have money, but accessing the funds is not that easy, even though the interest rates have come down," he said.

Mr Defor said he understood why banks remained cautious after the risks Ghana's financial crisis exposed. He nonetheless questioned where the available funds were going, suggesting some banks could be putting the money into government securities instead of lending to firms.

He called for reliable data on which sectors were receiving credit, noting that the central bank's liquidity management operations also affected how much banks had available to lend.

Araba IncoomAraba Incoom writes on multiple topics with a vast knowledge across different sector. You can almost call me an AI, after all, my initials are Araba Incoom.

AGI: 120% collateral demands shut businesses out of bank credit

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