{"id":378477,"date":"2017-11-29T06:00:03","date_gmt":"2017-11-29T06:00:03","guid":{"rendered":"http:\/\/citifmonline.com\/?p=378477"},"modified":"2017-11-29T05:54:04","modified_gmt":"2017-11-29T05:54:04","slug":"ghana-card-digital-address-will-help-reduce-interest-rates-bawumia","status":"publish","type":"post","link":"https:\/\/citifmonline.com\/2017\/11\/ghana-card-digital-address-will-help-reduce-interest-rates-bawumia\/","title":{"rendered":"Ghana card, digital address will help reduce interest rates – Bawumia"},"content":{"rendered":"

Ghanaians can look forward to a reduction in the amounts they pay as interest on loans<\/strong><\/a> because according to the Vice President, Dr. Mahamudu Bawumia, measures have been put in place to formalize the Ghanaian economy.<\/p>\n

According to him, the digital property addressing system<\/strong><\/a><\/span> as well as the rolling out of the National Identification cards<\/strong><\/a><\/span> are all geared towards making this dream come true.<\/p>\n

The average interest rate as at September 2017, was at 29% with banks citing the high risk of loan defaulters as a major factor contributing to the high interest rate.<\/p>\n

South African banks charge an average of 10.25%, according to figures from their central banks.<\/p>\n

[contextly_sidebar id=”QUQJoP51O4u8SzCjXTTgyToUiyDe9txd”]Speaking at the 21 st National Banking Conference, organized by the Charted Institute of Bankers, in Accra on Tuesday November 28, 2017, Vice President Bawumia explained that, Ghana has one of the highest mortgage-to- income ratios in the world, and high interest rates because of the largely informal nature of her economy, and the reforms being undertaken by the Nana Akufo-Addo government are meant to address this challenge.<\/p>\n

Dr. Bawumia, who is a former deputy governor of the Central bank, said banks are unable to lend at low rates because of the risks associated with lending to an unknown quantity, hence Government\u2019s decision to introduce measures such as the National ID card and the Digital Property Addressing system to make it easier to identify and trace borrowers and thereby reduce the risk premium.<\/p>\n

\u201cAs bankers, we\u2019ve always realized that high interest rates makes it difficult for customers to pay, and it makes the banking system very fragile. Banks face many problems. The risk that customers present: they come to you, you don\u2019t know what their history is, there is no unique ID for an individual customer; you cannot tell. The credit reference system is not really robust so you don\u2019t know exactly what their history is, how many banks they\u2019ve taken loans from and they haven\u2019t paid, whether there\u2019s been a change of name in the middle; you are presented with an unknown quantity and sometimes somebody opens an account today and they want to borrow money that same afternoon.”<\/p>\n

\u201cThe risk is quite high…because you are dealing with depositors\u2019 funds, but you don\u2019t know who they (borrowers) are, and you don\u2019t know where they live, so we (government) basically said you need to at least put these fundamentals in place before you can really expect a sustainable decline in interest rates that can be driven by proper risk assessment through credit rating agencies and so on.”<\/p>\n

He added that these problems among others, compelled government to employ technology in a bid to tackle the challenge.<\/p>\n

\u201cThis is what is driving the issue of the national ID card. The National Digital Property Address System has also been launched. Preparations are underway for the mass issuance of the national ID card so that we can really trace customers, we can build a robust credit reference agency and together these will be very fundamental to reducing interest rates and strengthening the stability of our financial system and our banking system,\u201d he added.<\/p>\n

The Vice President urged banks to play a greater role in growing and strengthening Ghana\u2019s economy, while assuring of government\u2019s commitment to ensuring macro-economic stability.<\/p>\n

\u201cI challenge banks to be relevant to the economy by extending loans to the productive sectors particularly the Small and Medium Scale Enterprises. As a government, we are committed to improving the economy through the pursuit of prudent financial management policies.<\/p>\n

\u201cThe future of banking is bright, but we have a lot to do together as key stakeholders in the industry. Let us pursue banking reforms and policies that will strengthen prudential and regulatory oversight to maintain a resilient banking sector.\u201d<\/p>\n

The 21 st National Banking Conference is under the theme \u201cBuilding a Robust and Sustainable Banking System in Ghana\u201d.<\/p>\n

It is being attended by heads of banking institutions in Ghana, as well as current and former Governors of the Bank of Ghana.<\/p>\n

–<\/p>\n

By: citifmonline.com\/Ghana<\/p>\n","protected":false},"excerpt":{"rendered":"

Ghanaians can look forward to a reduction in the amounts they pay as interest on loans because according to the Vice President, Dr. Mahamudu Bawumia, measures have been put in place to formalize the Ghanaian economy. According to him, the digital property addressing system as well as the rolling out of the National Identification cards […]<\/p>\n","protected":false},"author":7,"featured_media":378485,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[32,11],"tags":[389,1174,2260,3,10057],"yoast_head":"\nGhana card, digital address will help reduce interest rates - Bawumia - Citi 97.3 FM - Relevant Radio. 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