Informal sector workers appeal for reduced interest rates on borrowing
Participants at the Bank of Ghana’s sensitisation programme on banking services, consumer rights and responsibilities, have appealed to financial institutions to reduce interest rates on loans to stimulate business activities in the country.
They expressed concern over the “excessively high” lending rates by banking and micro-finance institutions, making it difficult for entrepreneurs and young business owners to succeed in the business environment.
The objective of the programme, held in Sunyani, was to educate the public, particularly informal sector workers, on financial management to enhance their fiscal literacy to make informed decisions.
The participants included artisans, traders, small and medium-scale enterprises owners, members of the garage association and social clubs drawn from Sunyani and its environs.
During an open forum, Madam Yaa Abrafi, a hardware dealer, said the current interest rates were unaffordable for traders.
She questioned how business operators who took a loan at a 40 per cent interest rate could possibly repay and generate profit for the growth of their businesses under such conditions.
“The high interest rates have led to the collapse of many businesses in the informal sector, because they struggled to meet their loan obligations and ultimately forced out of business,” she said.
Madam Abrafi, therefore, appealed to the BoG, being the financial regulator, to review the existing policies and laws to regulate interest rates in the public’s interest to help promote local businesses growth.
She, nonetheless, commended the BoG for initiating and implementing the informative programme, and said it had enlightened participants on issues within the banking sector, which, hitherto, they had little knowledge of and hindering their financial progress.
Reverend Kwasi Twum, the Chief Manager, Financial Stability Department at the Bank of Ghana, said interest rates were not regulated by the Bank of Ghana, clarifying that they were rather determined by the inter-play of market forces of demand and supply prevailing in the market.
He said the BoG had issued licenses to numerous financial institutions to operate, so it was the responsibility of business operators to identify those offering the most favourable lending rates that guaranteed easiest loan repayment to do business with.
Source: GNA