BoG urges borrowing public to do due diligence

The Head of Conduct Supervision-Bank of Ghana (BoG), Augustine Amoako Donkor, has urged the borrowing public to do due diligence before contracting loans from financial institutions.

He explained that the central bank has initiated measures, including public sensitisation, as part of efforts to address concerns of borrowers and lenders alike. He however noted that the bank’s efforts alone are not enough, hence the need for borrowers to take reasonable steps to protect themselves.

He spoke to the B&FT on the sidelines of a sensitisation programme on banking services, consumer rights and responsibilities for market women at Kejetia, Ashanti Region. Mr. Donkor mentioned a number of factors they should know, understand and consider before taking loans.

He advised women traders at the Kejetia Market to desist from “rushing in for loans when they do not fully understand the terms and conditions”.

The traders were also urged to ensure that they only take loans from institutions licenced by the BoG.

“In most of our sensitisation programmes we dwell a lot on loans; because if care is not taken, it is an area that runs down your business. Make sure that the source of the loan is licenced by a financial regulator.

“Once you settle on a licenced institution, the other thing that’s crucial is to obtain terms and conditions governing that facility – and make sure you have read and understood them. Ask all relevant questions, especially about charges on the loan – because that is where we have a lot of issues. If answers are provided and you are not comfortable with them, we advise that you move to a different provider,” he stressed.

Furthermore, Mr. Donkor empahsised the need for customers to pay back their loans; as failure to do so can have repercussions not only on the lender but the country’s economy as well.

He further described diverting loans from their intended purpose as “not a financially sound practice”.

The sensitisation programme is part of the BoG mandate, which requires them to put in place measures that will adequately protect the interest of products and services churned out by financial institutions licenced by the Bank of Ghana.

Public sensitisation is one of the ways that the regulator uses to inform, educate and empower customers; such that they will be abreast with their rights and responsibilities, so their rights are not abused.