Banks urged to offer better interest rates

Willing Vanderpuije, Head of Ghana Banking Awards Committee, has urged banks to offer good interest rates to their clients.

According to him, “When interest rates put on loans by the banks are too high, it deters customers from taking loans to grow their businesses.” Many business people have complained about the high interest rate charged by banks, describing the phenomenon as a vile rip-off.

They argue that the soaring interest rates mean that whilst the commercial banks make unusually monumental profits, small-scale businesses, which borrow money from the banks, struggle to survive.

Speaking in an interview with CITY & BUSINESS GUIDE, Mr. Vanderpuije urged the banks not to think about making profits only but also concentrate on how to grow the businesses of clients by reducing interest rates.

He called on the banks to spread wide their interest rates to enable customers who accesses loans to pay without stress.

However, he cautioned that the interest rate spread should not be too wide.

This, according to Mr. Vanderpuije, was because it breaches ethical issues and it also scares away clients from taking loans to expand their businesses.”

He said depositors should also be given good interest rates, stating that “we need to offer depositors very good interest rates. This will encourage them to save a lot more.”

Mr. Vanderpuije said, “We have only 25 percent of the country’s population saving at the banks. This means that the banks are not doing enough to attract more people to save.

“I believe that when banks offer good interest rates to depositors, it can help to attract more Ghanaians to save.”

Meanwhile some commercial banks in the country posted huge profits in their operations for last year.

The financial statements revealed that loans, deposits as well as interest, earned from transactions went up substantially.

Ghana Commercial Bank (GCB), as a group, has so far posted one of the highest profits in the industry with GHC192 million.

The success of the banks has been attributed to high interest rate, which experts say does not auger well for customers.