The Chief Executive Officer of the Ghana National Chamber of Commerce and Industry (GNCCI), Mark Badu Aboagye, says commercial banks in the country have exhausted all excuses for withholding credit from the private sector, following the government’s reduced appetite for domestic borrowing.
Speaking on Joy News’ PM Express Business Edition on Thursday monitored by Elvisanokyenews.com, Mr. Badu Aboagye explained that the development of any economy thrives on partnership, stressing that banks must now assume their full role in supporting businesses. He noted that with the government no longer crowding out the market, banks have little justification to hold back their loan portfolios.
“The development of an economy for me is a partnership. The banks will play their role because if they don’t go for the loan, the money will be there; there’s nothing you can do with it. Now that government is not borrowing, with the TB rate now at 10%, gone are the days where it was 25%, where the banks would take their money, give it to government, go and sleep, make 25% interest and high profit.”
He disclosed that the changing trend presents a major opportunity for strengthening private sector growth. According to him, credit to the private sector has already begun to rise, a development he believes must be sustained to accelerate economic expansion.
“Now that trend is changing. Government is not borrowing, so you have no option than to give it to the private sector. We’ve seen an increase in the credit to the private sector, and I’m sure that it’s going to be sustained. That is where we’ll be able to move our economy forward.”
Mark Badu Aboagye further stated that lower interest rates would benefit both businesses and banks, noting that improved borrowing conditions would reduce non-performing loans while boosting the profitability of financial institutions.
“In fact, if interest rates should come down and businesses are borrowing, the bank themselves will also do very well. They will make a lot of profit because non-performing loan will also go down. So we are holding them to their word, and obviously we are all here; we will be analyzing.”
Source: Elvisanokyenews.com
