• About
  • Advertise
  • Privacy Policy
  • Contact
Saturday, October 25, 2025
  • Login
The Vaultz News
  • Top Stories
  • News
    • General News
    • Education
    • Health
    • Opinions
  • Economics
    • Economy
    • Finance
      • Banking
      • Insurance
      • Pension
    • Securities/Markets
  • Business
    • Agribusiness
    • Vaultz Business
    • Extractives/Energy
    • Real Estate
  • World
    • Africa
    • America
    • Europe
    • UK
    • USA
    • Asia
    • Around the Globe
  • Innovation
    • Technology
    • Wheels
  • Entertainment
  • 20MOBPL2DNew
  • Jobs & Scholarships
    • Job Vacancies
    • Scholarships
No Result
View All Result
The Vaultz News
  • Top Stories
  • News
    • General News
    • Education
    • Health
    • Opinions
  • Economics
    • Economy
    • Finance
      • Banking
      • Insurance
      • Pension
    • Securities/Markets
  • Business
    • Agribusiness
    • Vaultz Business
    • Extractives/Energy
    • Real Estate
  • World
    • Africa
    • America
    • Europe
    • UK
    • USA
    • Asia
    • Around the Globe
  • Innovation
    • Technology
    • Wheels
  • Entertainment
  • 20MOBPL2DNew
  • Jobs & Scholarships
    • Job Vacancies
    • Scholarships
No Result
View All Result
The Vaultz News
No Result
View All Result

Current interest rate is still high to encourage SMEs borrowing- Seth Akwaboah

M.Cby M.C
June 7, 2021
Reading Time: 3 mins read
M.Cby M.C
in Vaultz Business
0
AGI welcomes establishment of National Development Bank

Chief Executive Officer of the Association of Ghana Industries, Seth Twum Akwaboah.

Chief Executive Officer of the Association of Ghana Industries (AGI), Seth Twum Akwaboah, has disclosed that, the current interest rate is still high to encourage businesses to borrow from banks. According to him, the number of non-performing assets or loans have gone up and this translates to high cost of capital.

Speaking in an interview with the Vaultz Media, Mr. Akwaboah explained that there is a cause for worry if the reduction does not affect other areas of the economy.

“It is a fact that the current interest rate is still high to encourage SMEs borrowing. If you look at the non-performing assets or loans, it has actually gone up. If you look at it last year, it’s gone up hugely. The ratio used to be 15% but it’s 15.5%, meaning that a lot more enterprises’ loans from the bank are not performing.

“When there’s higher non-performance level, it translates into higher cost of capital if the risk factor is high. Therefore, if the policy rate is coming down and we don’t see improvement in other micro-economic areas that enable the businesses to pay their loans… it cannot translate into significant reduction of interest rate and that’s where our worry is”.

That notwithstanding, the AGI boss welcomed the reduction, stating that, the policy rate is an indicator of the country’s “health”. As a result, a reduction means the country has a healthier microeconomic environment, “which for me is positive”.

RelatedPosts

Swelling Trade Cost, Africa Loses US$5b Annually– AfCFTA

MobileMoney LTD Leads a Collaborative Effort Among Fintech Ecosystem Players to Harness Digital Credit and Asset Regulation

Ghana’s Textile Policy Faces Old Structural Hurdles, IMANI Warns

“So, that’s why we say generally speaking, we are very positive with the fact that the policy rate is coming down. We want it to achieve the ultimate result of influencing the interest rate”.

Cost of capital to business

Commenting on the policy rate, he noted that, it is supposed to impact on the interest rate, which serves as a benchmark. Mr. Akwaboah further averred that an improved policy rate will likely impact on the cost of capital to business.

“Therefore, if you look at the trend, a high policy rate usually connotes high interest rate. So, when there’s a reduction, it means that there’s a potential improvement in the interest rate level and the interest rate is the cost of capital to businesses; and you want your cost of capital to come down.

“In Ghana, the cost of capital is very high, so a reduction in policy rate is usually welcome. The caution we normally throw though is that, normally when there’s a reduction in policy rate, [there’s no] corresponding reduction or proportionate reduction in interest rate”.

Furthermore, Mr. Akwaboah iterated the fact that the reduction will not necessarily impact the interest rate. This he explained, is a cause for concern.  

“So, it is good to have it reduced because if we do not have it reduced; we will definitely have interest rates going up. Therefore, we welcome the reduction in policy rate. We want to believe that this time round efforts will be made to let the reduction in policy rate translate into the reduction of interest rate. Of course, that will require a lot of things to happen in the economy and also at the banking front”.

Expectations from universal banks

Touching on AGI’s expectation from the universal banks, Mr. Akwaboah expressed the need for banks to work towards reducing the rate to businesses. According to him, this will help SMEs gain access to finance.  

ADVERTISEMENT

“Our expectation is that, they will factor this into the formula appropriately and actually work towards reducing the interest rate to the borrower. If you are not borrowing, it means business won’t be expanded that fast. Therefore, our expectation from the financial institution is that, they will actually work towards a reduction in the interest rate so that the best of the policy ratio is positive”.

Read Also: We want to take advantage of technology to digitize education in Ghana – Dr. Adutwum

Tags: AGIGhana Newsinterest rateNon-performing loansPolicy rate
Please login to join discussion
Previous Post

African Development Bank trains development finance experts

Next Post

More ambitious climate action absent, G7 economies to lose 8.5% annually by 2050- Oxfam

Subscription Form

Related Posts

Swelling Trade Cost, Africa Loses US$5b Annually– AfCFTA
Vaultz Business

Swelling Trade Cost, Africa Loses US$5b Annually– AfCFTA

October 23, 2025
MobileMoney LTD Leads a Collaborative Effort Among Fintech Ecosystem Players to Harness Digital Credit and Asset Regulation
Vaultz Business

MobileMoney LTD Leads a Collaborative Effort Among Fintech Ecosystem Players to Harness Digital Credit and Asset Regulation

October 21, 2025
Ghana’s Textile Policy Faces Old Structural Hurdles, IMANI Warns
Vaultz Business

Ghana’s Textile Policy Faces Old Structural Hurdles, IMANI Warns

October 21, 2025
Trade Minister Champions Investment and Digital Focus at UNCTAD XVI, Geneva 
Vaultz Business

Trade Minister Champions Investment and Digital Focus at UNCTAD XVI, Geneva 

October 20, 2025
Africa’s Digital Revolution Hinges on Cross-Border Interoperability – Telecom Chamber Boss Declares
Vaultz Business

Africa’s Digital Revolution Hinges on Cross-Border Interoperability – Telecom Chamber Boss Declares

October 20, 2025
Millions Lost to Mobile Money Scams as Cyber Fraud Skyrockets in Ghana — CSA Raises Alarm
Vaultz Business

Millions Lost to Mobile Money Scams as Cyber Fraud Skyrockets in Ghana — CSA Raises Alarm

October 19, 2025
GSE Closes Week in Red as Market Capitalization Dips to GHS 166.5bn
Securities/Markets

GSE Closes Week in Red as Market Capitalization Dips to GHS 166.5bn

by M.COctober 25, 2025
President John Dramani Mahama
General News

President Mahama Introduces Major Reforms to Strengthen Disability Rights

by Silas Kafui AssemOctober 24, 2025
President John Dramani Mahama
General News

Ghana Rollout Free Tertiary Education for PWDs, Mahama Calls it a Landmark for Social Justice

by evansjrOctober 24, 2025
Focus on Building Party Unity, Not Open Endorsements – Buckman Chides Minority MPs
General News

Focus on Building Party Unity, Not Open Endorsements – Buckman Chides Minority MPs

by Emmanuel Tibila BoasahOctober 24, 2025
Goldbod
Extractives/Energy

CLGB Commends GoldBod for Transforming Ghana’s Small-Scale Mining Sector 

by Prince AgyapongOctober 24, 2025
Ghana’s Total Credit Plummets 39% Year-on-Year to GH¢8.6bn in August 2025
Banking

Ghana’s Total Credit Plummets 39% Year-on-Year to GH¢8.6bn in August 2025

by M.COctober 24, 2025
GSE Closes Week in Red as Market Capitalization Dips to GHS 166.5bn
President John Dramani Mahama
President John Dramani Mahama
Focus on Building Party Unity, Not Open Endorsements – Buckman Chides Minority MPs
Goldbod
Ghana’s Total Credit Plummets 39% Year-on-Year to GH¢8.6bn in August 2025

Recent News

GSE Closes Week in Red as Market Capitalization Dips to GHS 166.5bn

GSE Closes Week in Red as Market Capitalization Dips to GHS 166.5bn

October 25, 2025
President John Dramani Mahama

President Mahama Introduces Major Reforms to Strengthen Disability Rights

October 24, 2025
President John Dramani Mahama

Ghana Rollout Free Tertiary Education for PWDs, Mahama Calls it a Landmark for Social Justice

October 24, 2025
Focus on Building Party Unity, Not Open Endorsements – Buckman Chides Minority MPs

Focus on Building Party Unity, Not Open Endorsements – Buckman Chides Minority MPs

October 24, 2025
Goldbod

CLGB Commends GoldBod for Transforming Ghana’s Small-Scale Mining Sector 

October 24, 2025
Ghana’s Total Credit Plummets 39% Year-on-Year to GH¢8.6bn in August 2025

Ghana’s Total Credit Plummets 39% Year-on-Year to GH¢8.6bn in August 2025

October 24, 2025
The Vaultz News

Copyright © 2025 The Vaultz News. All rights reserved.

Navigate Site

  • About
  • Advertise
  • Privacy Policy
  • Contact

Follow Us

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In
No Result
View All Result
  • Top Stories
  • News
    • General News
    • Education
    • Health
    • Opinions
  • Economics
    • Economy
    • Finance
      • Banking
      • Insurance
      • Pension
    • Securities/Markets
  • Business
    • Agribusiness
    • Vaultz Business
    • Extractives/Energy
    • Real Estate
  • World
    • Africa
    • America
    • Europe
    • UK
    • USA
    • Asia
    • Around the Globe
  • Innovation
    • Technology
    • Wheels
  • Entertainment
  • 20MOBPL2D
  • Jobs & Scholarships
    • Job Vacancies
    • Scholarships

Copyright © 2025 The Vaultz News. All rights reserved.

Discover the Details behind the story

Get an in-depth analysis of the news from our top editors

Enter your email address