The banking sector in Ghana has revealed its willingness to continue to provide credit support to various areas of the economy in light of the COVID-19 pandemic.
The Head of the Ghana Association of Bankers, Chief Alhassan Andani, said in an interview that the banking industry has given over 4 billion Ghana cedis in terms of credit support to other sectors of the economy in need of these facilities.
He made this statement in response to reports of accusations from the general public claiming that financial institutions in the country are doing little in the way of supporting Ghanaian businesses and industries in the wake of the coronavirus pandemic.
According to Chief Andani, financial institutions in the country had actually provided credit facilities to a large number of businesses from all sectors of the economy including telecommunication networks, manufacturing industries and agro-businesses.
“We are well over 4 billion cedis in terms of total credit”.
He was especially optimistic about agriculture, asserting that while other sectors had experienced contractions in the midst of the pandemic, the agricultural sector had experienced a growth of more than 2 percent.
Touching on the perceived high interest rates on credit facilities in the country, he said that rates had actually dropped significantly despite the effects of the pandemic on the economy, asserting that the base rate had dropped down from about 17 percent to approximately 14.5 percent. He added that while these rates were higher compared to those of neighbouring nations, they were a realistic reflection of the current economic situation of the country. He, however, expressed hope that the rates could continue to drop, encouraging Ghanaians to patronize locally produced goods and services in order to facilitate further reductions in the rates.
The head of the association also added that though banks are more than ready to aid the growth of local enterprises and industries with the provision of credit facilities, certain factors need to be taken into consideration when giving out such support.
“Management and banking is about the allocation of resources—efficient allocation of resources, and if you’re going to allocate resources efficiently, naturally, those that don’t meet your efficient [quota] will say they haven’t got service.”
Apart from displaying the banking sector’s eagerness to aid economic recovery in the country through the granting of credit facilities, Chief Andani, envisioned a new direction for the sector, saying that the sector was being increasingly digitized. He said that this would have an immense positive impact on financial institutions and the nation at large as a switch to more digitized banking systems would not only bring financial services to a greater number of people at a greater depth, but could also make the provision of financial services cheaper in the long run.
“The sheer numbers of individuals, SMEs and companies that will be banking; they’ll be just a lot, over which you can spread your fixed cost. So, we expect the cost to serve to drop”.
He further assured that banks were ready to partner with real estate companies, insurance providers and telecommunication companies to provide financial services to Ghanaians in a more safe, holistic and efficient manner in order to create the right environment for the country’s economy to recover.
