Chief Executive of the Ghana Association of Bankers, John Awuah has noted that average lending rates could drop significantly to 15 to 10 percent.
According to Mr. Awuah, this will be based on improvement in the current economic fundamentals.
The Chief Executive disclosed this to host George Wiafe when he appeared on PM Express Business Edition on the topic 'Bank Charges and Service Delivery in Ghana' on 9 September 2021.
His response comes on the back of calls for interest rates reduction.
But Mr. Awuah maintained that the banks are “ever” committed to reducing interest rates.
He maintained as long as the economic situation and variables improve, rates will drop automatically.
“We have seen rates dropped from over 30% some years ago to average 20%, when the situation [economic fundamentals] did improve," he said on JoyNews.
"And I can assure you it could go down further. “We are never excited when interest rates are high because it hurts our businesses too. This is why we are all working together, with the relevant regulators to drive down the cost of credit", Mr. Awuah noted.
Businesses benefiting from interest rates reduction
The Chief Executive of the Ghana Association of Bank also made making a strong case for businesses to respond to these lending rate cuts.
According to Mr. Awuah, this is one of the surest ways that the reduction in interest rates by banks will be felt by all sectors of the economy.
Rising Non-Performing loans and role of the judiciary
Non-Performing Loans continue to hit levels which many have described as worrying.
The Bank of Ghana put the total industry NPL at the end of June at about ¢8 billion cedis, a development that has been compounded by Covid-19 which has made it difficult for most businesses to honour their loans because of the negative impact of the pandemic on their operations.
But speaking on PM Express, Mr. Awuah said the Judiciary has not been helpful with respect to checking the high loan default rates in the country.
“We need to let borrowers understand that when they default there are consequences and I think that the judiciary is not helping in this area” he added.
Mr. Awuah noted that “there have been a lot of instances where banks have secured Judgment and later someone pops up that the property belongs to them and the court grants their requests by freezing enforcement”
“We don’t think that enough has been done to deal and check persons that default on loans", he further said.
“I will put the current judiciary support at around 30% in terms of assistance” the Chief Executive of the Ghana Association of Bankers noted.
Complying with recent Bank of Ghana’s directive
Mr. Awuah noted that as far as he is concerned members of the association have complied with the recent directive of some charges that are deemed to be illegal.
But on the question of capping charges, Mr. Awuah said apart from regulation that seeks to check illegal fees, commercial banks should be left to allow the forces of demand and supply to guide these charges.
Latest Stories
-
Netflix debuts Grain Media’s explosive film
18 mins -
‘Expired’ rice scandal: FDA is complicit; top officials must be fired – Ablakwa
52 mins -
#TheManifestoDebate: We’ll provide potable water, expand water distribution network – NDC
1 hour -
IPR Ghana@50: Pupils educated to keep the environment clean
1 hour -
PenTrust CEO named ‘Best Pensions CEO’, company wins ‘Scheme Administrator Award’ at Ghana Accountancy & Finance Awards 2024
2 hours -
Alan Kyerematen’s ‘Brighter Future for Health Professionals’ in Ghana Revealed in Bono
2 hours -
#TheManifestoDebate: NPP will ensure a safer, cleaner and greener environment – Dr Kokofu
2 hours -
2024 Election: Police to deal with individuals who will cause trouble – IGP
2 hours -
Seychelles President’s visit rekindles historical and diplomatic ties with Ghana
2 hours -
Election 2024: EC destroys defective ballot papers for Ahafo and Volta regions
2 hours -
2024 Election: I am sad EC disqualified me, but I endorse CPP’s candidate – PNP’s Nabla
3 hours -
I want to build a modern, inclusive country anchored by systems and data – Bawumia to CSOs
3 hours -
Miss Health Ghana 2024: Kujori Esther Cachana crowned new Health Ambassador
3 hours -
Playback: The manifesto debate on WASH and climate change
3 hours -
Alan Kyerematen saddened by NDC and NPP’s neglect of Krofrom Market in the Ashanti Region
3 hours