{"id":756453,"date":"2019-12-02T16:10:09","date_gmt":"2019-12-02T16:10:09","guid":{"rendered":"https:\/\/ghana-mma.com\/2019\/12\/02\/bogworks-at-reducing-lending-rates\/"},"modified":"2019-12-02T16:10:09","modified_gmt":"2019-12-02T16:10:09","slug":"bogworks-at-reducing-lending-rates","status":"publish","type":"post","link":"https:\/\/www.ghanamma.com\/2019\/12\/02\/bogworks-at-reducing-lending-rates\/","title":{"rendered":"BOGWorks At Reducing Lending Rates"},"content":{"rendered":"<p><\/p>\n<div>\n<p>THE<br \/>\nBANK of Ghana (BoG) says it is exploring new prudential and market conduct<br \/>\nregulatory measures to help foster more competition in the banking sector and<br \/>\nhelp lower lending rates.<\/p>\n<p>It<br \/>\nsaid this has been necessitated by high operating costs of banks which stem<br \/>\nfrom operational inefficiencies; inadequate disclosures of the risk premium<br \/>\nfactors in the cost of credit determination; the existence of high NPLs; and<br \/>\ngovernment\u2019s appetite for domestic borrowing.<\/p>\n<p>Such<br \/>\nfindings were contained in recent data presented to the BoG by its monetary<br \/>\npolicy committee (MPC).<\/p>\n<p>The<br \/>\nreport revealed that the afore-mentioned factors should be addressed<br \/>\ncomprehensively to help lower lending rates and improve on the transmission of<br \/>\npolicy changes to the real economy in support of higher and robust economic<br \/>\nactivity. <\/p>\n<p>Chairman<br \/>\nof the MPC, Dr Ernest Addison, who made these known to journalists, Monday, in<br \/>\nAccra, said to further provide increased activity in the small and medium enterprise<br \/>\n(SME) sector, his outfit was setting aside two per cent of its primary reserve<br \/>\nto support targeted lending to SMEs as part of the Enterprise Credit Scheme<br \/>\nannounced in the 2020 budget. \u00a0\u201cThese funds<br \/>\nwill be held at BoG and will be available to banks that participate in the<br \/>\nscheme.\u201d <\/p>\n<p>He<br \/>\nalso said his outfit would explore the possibility of setting a minimum loan to<br \/>\ndeposits ratio to ensure that more deposits mobilized by banks were channeled<br \/>\nto viable private sector projects.<\/p>\n<p><strong>According to him, BoG would hold further<br \/>\nconsultations with the banking industry to determine the impact of such a<br \/>\nregulatory measure, and if warranted, determine the level of such a ratio and<br \/>\nappropriate monitoring and enforcement mechanisms to promote its effectiveness.<br \/>\n<\/strong><\/p>\n<p>Also,<br \/>\nhe said \u201cThe BoG is putting in measures to reinforce the existing credit<br \/>\ninfrastructure by, among other things, strengthening enforcement of the credit<br \/>\nbureau system under proposed regulations to be made by Parliament pursuant to<br \/>\nthe Credit Reporting Act of 2007 (Act 726), and further strengthen the<br \/>\ncollateral enforcement mechanism under a new Borrowers and Lenders Bill to<br \/>\nimprove the quality of loans made by banks as well as facilitate recovery of<br \/>\nloans and collateral. <\/p>\n<p>Furthermore,<br \/>\nhe said BoG would be working closely with banks to ensure that banks did not<br \/>\npass on their operational inefficiencies and overhead costs to their clients. <\/p>\n<p>Additionally,<br \/>\nto further deepen transparency in the determination of lending rates, the governor<br \/>\nsaid banks would be required to develop and publish a clear framework on the<br \/>\nrisk premium build-up that impacted on an individual borrower\u2019s credit<br \/>\nprofiles. And this, he said was expected to provide borrowers with a<br \/>\nmore-informed basis for negotiating lending rates with their banks and enhance<br \/>\ntransparency in the credit delivery process as well as promote responsible<br \/>\ncredit behaviour from borrowers. <\/p>\n<p><strong><em>e-Cedi<\/em><\/strong><\/p>\n<p>He said BoG was in discussion with key stakeholders to explore a pilot project in a sandbox environment on central bank digital currency with the possibility of issuing the e-Cedi in the near future.<\/p>\n<p> <strong>BY Samuel Boadi <\/strong><\/p>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"<p>THE BANK of Ghana (BoG) says it is exploring new prudential and market conduct regulatory measures to help foster more competition in the banking sector and help lower lending rates. It said this has been necessitated by high operating costs of banks which stem from operational inefficiencies; inadequate disclosures of the risk premium factors in [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":728754,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"class_list":["post-756453","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.1 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>BOGWorks At Reducing Lending Rates - Ghanamma.com<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ghanamma.com\/2019\/12\/02\/bogworks-at-reducing-lending-rates\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"BOGWorks At Reducing Lending Rates - Ghanamma.com\" \/>\n<meta name=\"twitter:description\" content=\"THE BANK of Ghana (BoG) says it is exploring new prudential and market conduct regulatory measures to help foster more competition in the banking sector and help lower lending rates. 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