The Bank of Ghana's (BoG) September report on the Annualized Percentage Rates (APRs) for banks’ loans to SMEs, households, and corporates has revealed that OmniBSIC Bank Ghana Ltd, United Bank Africa (UBA) (Ghana) Ltd, First National Bank (Ghana) Ltd (FNB), among others, lead with lower average lending rates to SMEs.
For a loan facility of one year tenor, FNB, UBA and OmniBSIC Bank Ghana Ltd average lending rates were 18.53 percent, 18.96 percent and 18.80 percent respectively. Meanwhile, a typical five-year loan tenor for the aforementioned banks also stood at 20.83 percent, 18.96 percent and 18.80 percent respectively.
On the contrary, Société General Ghana PLC, ADB, Bank of Africa (Ghana) Ltd’s one year tenor loan facilities reported the highest average lending rates with 27 percent, 25.74 percent and 25.26 percent respectively.
Nonetheless, adding other components including fees and charges to the above average lending, the indicative Annualised Percentage Rate (APR) (which is the true cost) of the loan facility inched CalBank PLC, Société General Ghana PLC and First Atlantic Bank Ltd to report the highest APRs while FNB, UBA and UMB report the least APRs on a one-year tenor loan facilities.
The BoG explained that “the APR reflects the true cost of a loan that economic agents are confronted with when they go through an approval process to secure a loan facility. It comprises the Ghana Reference Rate (GRR), bank specific risk-premia and other bank-specific charges.
“The APRs reported in this table are indicative. A typical customer of a bank may be faced with an actual APR different from these indicative APRs, depending on the bank’s assessment of the borrower’s specific circumstance.”
Source: Mohammed Bomanso Issah(Real Estate Times Africa)