Impact of Elevated Lending Rates on Sustainability in Ghanaian Businesses

This study looks at how high lending rates affect business sustainability in Ghana. The research design is descriptive and correlational. We analyzed the collected data using both descriptive and inferential statistics. Descriptive statistics, which include means, standard deviations, and frequencies, summarize the sample and the data. We used inferential statistics to test the study's hypotheses. A Pearson correlation analysis determined the strength and direction of the relationship between high lending rates and sustainable business operations. The Pearson correlation matrix shows significant negative correlations between lending rates and operational costs (-0.65), access to capital (-0.72), profitability (-0.58), and business growth (-0.70). These results support the idea that high lending rates negatively impact these important factors for SMEs. The multiple regression analysis reveals that lending rates significantly hurt various aspects of SME sustainability. High lending rates (β = -0.62 for profitability, β = -0.57 for business growth) lower both profitability and business growth, confirming that high lending rates harm SME sustainability. Additionally, operational costs significantly mediate this relationship (β = 0.45 for operational costs and -0.28 for business growth). These findings align with earlier research (Akorsu, 2020; Osei & Tandoh, 2022), which suggests that high lending rates increase the financial burden on SMEs, limiting their ability to grow and stabilize.