Which company will be able to borrow at 40%? - Bankers bemoan high interest rates

Chief Executive Officer of the Ghana Association of Bankers, John Awuah, has lamented the high cost of borrowing in Ghana.

According to him, the increasing interest rates on the treasury market do not favour banks in the long run.

He said the high cost of loans is risky because this increases the risk of default which affects banks’ profits.

“If the market rate moves into the 30 and 40s which company or household will be able to borrow at the rate and make good on the re-payment. We should not forget that if you give 10 loans and one goes bad it wipes off the benefits of the other nine,” he said on JoyNews.

Interest rates on treasury bills have been on an increasing spree in recent times.

The rates on the market are currently hovering above 28% to 30%. John Awuah is of the belief that if the upward trend continues, it may affect the profitability of banks.

“When these rates are going up, depositors are also pushing for high rates on their funds and that is not good for the banks,” Awuah added.

SSD/NOQ

Ghana’s leading digital news platform, GhanaWeb, in conjunction with the Korle-Bu Teaching Hospital, is embarking on an aggressive campaign which is geared towards ensuring that parliament passes comprehensive legislation to guide organ harvesting, organ donation, and organ transplantation in the country.

Watch the latest edition of BizTech and BizHeadlines below:

Ghana’s leading digital news platform, GhanaWeb, in conjunction with the Korle-Bu Teaching Hospital, is embarking on an aggressive campaign which is geared towards ensuring that parliament passes comprehensive legislation to guide organ harvesting, organ donation, and organ transplantation in the country.

Watch the latest edition of BizTech and BizHeadlines below:

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Click here to start the nomination process for the 2023 GhanaWeb Excellence Awards