DCA Loan Guarantee Ghana Impact Brief

Macroeconomic conditions in Ghana in 2000 severely constrained private sector access to credit. High levels of government borrowing pushed interest rates up and crowded the private sector out of financial markets. With government treasuries paying real interest of 16.8 percent, banks had little incentive to take on riskier private sector debt. High interest rates and exchange rate volatility also created financial uncertainty that made both borrowers and lenders hesitant to take on the risks associated with loans, particularly medium to long-term loans.

Monday, August 12, 2013 - 11:15am