Lend more to private sector to stimulate economic growth – Banking Consultant

• Dr Richmond Attuahene has said that the banks must be entreated to lend monies to the private sector to rope in more revenue

• New loans in advance totalled 10.5 billion cedis compared to 10.9 billion cedis last year April 2020

• Last year was severely hit due to the pandemic

Banking consultant, Dr Richmond Attuahene, has urged the government to lend more to the private sector to stimulate economic growth.

This comes on the back of total loans being restructured by banks to cushion customers who were severely impacted by the COVID-19 pandemic at 4.65 billion cedis as of March 2021.

This represents 9.8% of the banking industry loan portfolio. According to the Bank of Ghana, growth in private sector credits slowed down considerably in April this year compared with the same period last year.

Dr Attauhene said if there are no credits for the private sector, it could affect the country’s economy.

“If you look at the credit in the private sector, we are nowhere near we need to be to have a transformation agenda or to recover in the post-COVID-19. So government would have to reduce the numerous borrowing domestically to enable the banks to free credit to support the private sector. That means there is a crediting out. Crediting out means there is no credit anymore, for private sector development and that is not good for the general economy of the country,” he said in an interview with Joy Business monitored by GhanaWeb.

From the beginning of the year to April this year, new loans in advance totaled 10.5 billion cedis compared to 10.9 billion cedis for the same period last year.

Meanwhile, GUTA president Dr Joseph Obeng believes that some regulatory control must be put in place to ensure the bank cut its lending rates.

According to him, people who refuse to pay their loans must instead face the consequences and not burden those who pay their loans regularly on time. He called on the banks to do due diligence.

“We have seen it when it was 14.5% we didn’t do anything so we would plead with the Bank of Ghana to find some control system will necessarily push the commercial banks to do what they have to do. The honours lie on the bank to do their necessary due diligence and the fact that someone is not paying his bill or paying his loans does not mean that should be shared with the person who is paying legitimately.”

This is not fair, this is never done anywhere and that the person who pays his loan should be rewarded also and that the one who is not paying must be punished. So if you are saying people are not paying their bad loans and that is why we need to spread it evenly, that’s not fair,” he said.