Former First Deputy Governor of the Bank of Ghana, Dr. Maxwell Opoku-Afari, has urged businesses to prioritize loan repayment to financial institutions, including banks, as a strategy to help lower interest rates.

Speaking at the 2025 Church of Pentecost Global Business Conference, Dr. Opoku-Afari attributed the persistently high interest rates to the growing volume of non-performing loans in the banking sector.

He stressed that timely loan repayments by businesses would enhance the financial sector’s stability and create a more favorable lending environment.

“The biggest component of high interest rates in Ghana is non-performing loans (NPLs). When businesses borrow and they don’t pay, the bank siting down the will factor that loss[NPL] in calculating the next interest for you when you are coming to borrow. As you sit in Ghana, the non-performing loan is about 20 or 21%. Straight away as you approach the bank, 20 or 21% is the floor then they will add their cost and other things like administrative cost.

“That is why the rates are high. I am here appealing to businesses that when you go to a bank to borrow, it is not free. When you borrow, you pay. If you don’t pay, you pay it in another way because you go back to the bank again and you pay a higher rate because the bank is trying to recover the ones you haven’t paid,” Dr. Maxwell Opoku-Afari remarked.

The former First deputy governor of the Bank of Ghana also observed that Ghana has transitioned into credit scoring which allows banks to assess the risk associated with individual borrowers, much like in advanced economies.

He said with Ghana now entering this phase, individuals and businesses must prioritize timely loan repayments to benefit from better lending terms.

He stressed that widespread adherence to responsible borrowing and repayment practices could ultimately drive interest rates down to single digits, making credit more affordable for businesses and individuals.

“If Apostle Debrah has a very good credit history, and I don’t have a good credit history, when you go to the advance economies his business when he goes to borrow, they will give 5% or 10% interest rate but when I go to borrow they will give me 30% or 25% interest rate which means the bank is able to use your credit behavior to differentiate risk and know that you are more riskier than this person and so you get a reward for that.

“Ghana has entered into that phase where credit scoring is happening so when we go and borrow we should pay. When we all go and borrow and pay, we will see interest rate coming down and we will get to an environment where we can borrow at around single digit interest rate,” Dr. Opoku-Afari stated.