According to him, the financial sector and for that matter banks do not determine interest rates rather the performance of a country’s economy does.
He said, the high rate of Non-performing loans in the country is as a result of the inability of physical structures to control interest rates.
“It’s not the banks who determine interest rate, the performance of the economy will determine your interest rates” he said. Dr. Adu added that Ghana needs to change its recovery laws so that borrowers who are unwilling to pay their debts will willingly defaults.
According to him, when the English were here, they enacted a law which allowed the banks to have customers jailed for defaulting to pay a loan but unfortunately the situation is not the same now.
“Today I can borrow from a bank and then divert the money, buy a Rolls Royce and refuse to pay the bank and it will take eight years for the bank to be successful in recovering the loan “he said. The Cal Bank boss bemoaned on the issue of having the ability to secure a loan in Ghana an act of parliament adding that it was a major hindrance to loan securing in the country.
“Act 690 states categorically that, for me to give you a loan, you must secure the loan 120%, it’s an act of parliament, its madness, it doesn’t make sense” he said.
Dr. Frank Adu was speaking at the 2018 Ghana Finance Week on the theme “Achieving the UN sustainable development goals through innovative finance”
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