A former Deputy Governor of the Bank of Ghana (BoG), Mr. Emmanuel Asiedu-Mante has urged banks to consider the viability of businesses when advancing loans as against demanding houses and cars as collateral.<\/p>\n
According to him, the over reliance on collateral such as cars and houses, when granting loans is a high risk venture that require due diligence to determine the true owners of such properties.<\/p>\n
Speaking to\u00a0Citi Business News<\/strong>\u00a0after a forum organized by the University of Ghana Business School(UGBS)on the theme \u201cEmerging Issues in the Ghanaian Banking Industry\u201d, Mr. Asiedu-Mante warned that banks risk collapse if they demand for houses, and cars as collateral for loans.<\/p>\n \u201cThe evidence is what you just said. The banks have collapse. Why have they collapsed?.Because they did collateral lending. It\u2019s not the way to go. The money doesn\u2019t belong to you. Its depositors\u2019 money so when you are lending, be sure that the money goes and come back with interest\u201d.<\/p>\n Mr. Asiedu-Mante who worked over three decades at the Bank of Ghana cautioned banks to move away from the practice of demanding collateral in houses and cars since they are not reliable guarantees.<\/p>\n \u201cIf you are going to lend to somebody who says I have a house but there are no documents on it, where do you stand. The business of banking is trading with people\u2019s money, so you need people who understand the business of banking, economics or accounting,\u201d he stressed.<\/p>\n He observed that there is the need for banks to have the qualified members who understand the business of banking to lend to appropriate enterprises.<\/p>\n According to him, there is the need to fill board positions with persons with some experience in the banking industry to help take prudent decision.<\/p>\n \u201cPracticing corporate governance is key to prevent the collapse of banks. So when you have a board that doesn\u2019t have people with that knowledge or training, you are putting the business at risk,\u201d he warned.<\/p>\n Other speakers at the forum included Dr. John Mensah, Managing Director of adb Bank and Professor A.Q. Q.Aboagye from the Department of Finance, University of Ghana Business School.<\/p>\n –<\/p>\n By: Lawrence Segbefia\/citibusinessnews.com\/Ghana<\/p>\n","protected":false},"excerpt":{"rendered":" A former Deputy Governor of the Bank of Ghana (BoG), Mr. Emmanuel Asiedu-Mante has urged banks to consider the viability of businesses when advancing loans as against demanding houses and cars as collateral. According to him, the over reliance on collateral such as cars and houses, when granting loans is a high risk venture that […]<\/p>\n","protected":false},"author":14,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[121,32],"tags":[],"yoast_head":"\n