The growth in Deposit Money Banks’ (DMBs) credit to the private sector and public institutions has declined slightly recording GH¢7,358.1 million or 16.5% in the 12-month period to March 2020, down from GH¢8,594.0 million or 23.9% over the corresponding period in 2019.
Private sector credit accounted for a share of GH¢6,617.5 million or 89.9% compared with GH¢7,001.8 million or 81.5% during the same period in 2019.
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The flow of credit to the private sector was concentrated in five sub-sectors including services, commerce and finance, construction, manufacturing and transport, storage and communication, which collectively absorbed 79 percent of the credit extended over the period.
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Outstanding credit to the private sector at the end of March 2020 was GH¢45,339.5 million compared with GH¢38,722.1 million last year.
In real terms, growth of credit to the private sector over the 12-month period to March 2020 was 8.6 percent, down from 14.6 percent during the corresponding period in 2019, thus, moving below the long-term trend DMBs average lending rates similarly eased downward by 71 basis points from 23.09 percent in April 2019 to 22.38 percent in April 2020.
The average rate on 3-month term deposits remained unchanged at 11.50 percent. The general decline in nominal interest rates and the recent jump in inflation pushed real interest rates significantly down.
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