A Senior Economist at the Institute of Economic Affairs (IEA) Dr. J. K Kwakye says banks in the country are taking advantage of the current economic climate to make undue profits from their customers.
[contextly_sidebar id=”ovYGBVgCJgE3rYccKLbwL6wZLsU9bOUI”]The Economist believes banks are intentionally charging higher rates resulting in high cost of credit.
In an interview with Citi News, Dr. Kwakye asked government to introduce measures to aid businesses get access to cheaper credit.
“I suspect that the banks are benefiting from this kind of environment. Interest rates are high and therefore there is a tendency for people to be more accommodating of this high interest rates but they may be taking advantage of us. Interest rates are high and then money is also scarce. You go and want money
at all cost and then they say its 30 percent. You will take it. The margin for them to profit from is probably larger but it is up to government to intervene and correct some of these market failures,”Dr. Kwakye explained.
Ghana has one of the highest interest rates in the world; average interest rates hovers around 35% while that of microfinance institutions around the world stands at 70%.
Trade and Industry Minister, Dr Ekow Spio Gabrah in a bid to deal with the matter started a campaign in 2014 to push the rates down .
He earlier tasked business operators in the country to hit the streets to get banks to reduce the high interest rates.
Some bankers have however kicked against the approach, saying government must rather deal with the numerous factors including inflation, monetary policy rate, its increasing appetite to borrow which they believe results in interest rates high.
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By: Marian Efe Ansah/citifmonline.com/Ghana