Managing Director of Stanbic Bank Ghana, Alhassan Adani has urged businesses to take advantage of the lowest interest rate regime in 20 years to access credit and expand their businesses.
According to the Stanbic bank Ghana MD, banks in Ghana can now lend between 15 to 23 per cent. He added that interest rates are probably the lowest he has seen in the last two decades or more since he has been in banking, and as such called on the private sector and households to access credits to expand their businesses, and to produce more for consumption locally and for export. Exports have been touted as a major economic activity that could turn the fortunes of the country around in terms of the continuously weakening Cedi and its characteristic volatility.
According to him, the volatility can be managed because “the macro fundamentals are right and from the banking sector.
It could however be noted that though the interest rate may be at its lowest, access to finance may still not be that easy for businesses as the current forex rate, a very formidable indicator of the economy, remains too high and a burden to businesses. This creates a currency-induced risk for lending which the banks are very sensitive to. Banks therefore may not be too ready to take on these risks when the safer government bills could give a rate competitive to the lending rates. Much as Mr. Andani’s call is very positive for businesses, the businesses may still have a lot more barriers to deal with in terms of access to finance and its cost, as policy rate is not the only determinant of cost of credit.