Bank of Ghana concerned about high lending rates banks continue to charge
Second Deputy Governor of the Bank of Ghana (BoG), Mrs. Elsie Addo Awadzi has said the central bank is concerned about the relatively high lending rates that banks continue to charge.
To this end, she said, “We expect banks to significantly increase credit to the private sector, and to reasonable and affordable interest rates.”
Mrs. Addo Awadzie noted that Ghana’s banking sector remains one of the most attractive on the continent for investors.
She said the presence of pan-African banks like First Bank Nigeria and international banks here is testimony to that.
She noted the sector is stable, profitable, and resilient, supported by an enabling macroeconomic framework, regulatory and supervisory reforms that have promoted resilience, good corporate governance, effective risk management, and innovation in the industry.
Thanks to necessary and difficult reforms undertaken by the Bank of Ghana in recent years, and policy and regulatory reliefs announced at the onset of the COVID-19 pandemic, she said “our banking sector was well-positioned to withstand the economic shock fairly well.”
Among other things, she added, banks have played a critical role in helping to mute the effects of the pandemic on our real sector by restructuring loans and suspending loan repayments for customers who were negatively impacted by the pandemic.
“Banks provided new loans in the total amount of GHC 27,850,500,963.01 from March to December 2020 to sectors of the economy like the pharmaceuticals industry, the textiles, and garments industry, that were critical in helping to fight the pandemic, and helped to accelerate the recovery of our economy from the initial downturn and to support corporates and households in a number of value chains.
“The banking sector’s performance in 2021 to date has remained strong with sustained growth in total assets, deposits, loans, investments, and income, although credit risk remains a concern which the Bank of Ghana continues to monitor closely as the
pandemic rages on.
“We expect banks to continue in their efforts to support a strong recovery of the Ghanaian economy. To this end, we expect banks to significantly increase credit to the private sector, and to reasonable and affordable interest rates.
“We remain concerned about the relatively high lending rates that banks continue to charge their customers, with spreads over and above the Ghana Reference and very high fees, commissions and other costs imposed on customers which excludes many small and medium-sized businesses out of the credit market and by extension impedes their survival and growth.
“As a nation, we lose significant opportunities to grow strong viable brands that can compete with businesses across the African market and beyond, if we do not provide mechanisms for financing our small businesses on a consistent and sustainable basis.”
Source:3news
