Business in Ghana

We Understand the issues that make the News

Posts Tagged ‘Lee Kwan Yew’

Batakari For My Jacket. Critical News, 10th May 2015

Posted by Business in Ghana on May 10, 2015

Sydney Casely-Hayford, sydney@bizghana.com

On Tuesday, 31st May 2011, I organized and hosted a program I called The BiG Debate. We looked at the issue of high bank interest rates and its impact on Ghanaian businesses.

At that time, with bank interest rates as high as 30% in some cases and spreads ranging between 12% and 15%, banks continued to make high profits despite the claim that non-performing loans were a restriction on their performance and a key reason for less lending.

But there were other related arguments suggesting that Regulators, Government, Borrowers of Funds, Lenders to the banking sector as well as Bank’s own weak accounting all contribute in large measure to the persistently high lending rates in Ghana. Clearly, our stuttering economy would benefit from lower borrowing rates in the market place.

How to intervene and trigger a downward spiral in favor of the borrower has eluded analysts, Government and Donors. The BiG Debate attempted to identify the intervention points and offer answers to Government.

Treasury Bill rates were at 10%, and the competing business of risk lending took a back-step while Banks diverted deposits into 91-day bills and quicker profit yielding trade.

Two years on, the T Bill rate is at 25% and the situation is worse now than it was then. Read the rest of this entry »

Advertisements

Posted in Critical Weekly News, Sydney Casely-Hayford | Tagged: , , , , , , , , | Leave a Comment »