JAK Decries Lending Rates

PRESIDENT: John Agyekum Kufuor

PRESIDENT JOHN Agyekum Kufuor wonders why banks in the country have failed to reduce their lending rates in spite of the significant fall inflation rate had recorded over the last couple of months.

He has thus asked that banks to consider the current inflationary trend and commensurate it accordingly in the interest of Ghanaians.

"I appeal to the banks to seriously address this problem and other related ones that tend to make credit too expensive", said the obviously not too happy President.

Speaking at the inaugural ceremony of the Fidelity Bank in Accra over the weekend, the President entreated captains of industry, commerce and borrowers to generally develop the culture of servicing their loans to safeguard the viability of the institutions they depended on for credit and other financial services to support their operations.

He therefore tasked existing and emerging banks including Fidelity, a Ghanaian owned business entity, to create and open new strategies that would serve the interest of their customers instead of seeking for their interests only, because banks exist to serve the interest of the people.

The President noted that, "Government's macro-economic policies with the prudent fiscal and monetary management have contributed in no mean way to the current business-friendly environment which is attracting both local and foreign investors, including the Fidelity group and enhancing their businesses".

When adopted by Parliament, the President expressed the belief that the Credit Reporting Bill would provide an institutional framework to protect both interests of banks and credit-worthy borrowers and also seek to help remove bottlenecks to widen access to credit as all wish.

He considered the emergence of six banks within the last six years as a significant feat since it marks an improvement in service delivery and fair competition on the Ghanaian market.

Mr. Kufuor said Ghanaians must feel proud of the inception of Fidelity since it is a local entrepreneurship.

The President challenged individual Ghanaians and groups to go into the banking business to exploit the benefits that it have since it has a lot to offer.

As a new bank, he tasked the Fidelity bank not to afford being anything less than proactive, innovative, business-minded and highly professional.

He particularly challenged management and staff of the bank to, "take calculated plunge into the wider segment of the relatively virgin parts of the informal sector, including the micro and small-scale enterprises".

This conviction, according to him, informed government's policy to establish the Micro Credit and Small Loans Scheme (MASLOC), which was launched only a month ago with the intention of reaching out to all segments through access to financial services.

On his part, Edward Effah, Managing Director and Chief Executive of new Fidelity bank, which used to be a discount house in the country, took up the challenge thrown by the President and assured him, that he and his team of experts with several years of related experience, would live up to expectation.

He expressed the conviction that within some years comes, not too long a time, Fidelity would spread through other continents and become Ghana's first international bank with branches across the globe.

For the time being, the bank is housed in a plush magnificent building at Ridge in Accra and expects to open four new branches by the end of the year ending 2007, with one in Tema, Kumasi and two more in Accra.

The bank is being managed by what has being severally described as the safest pair of hands including Edward Effah, the MD, Jim Baiden, Deputy Managing Director and a couple of hard working and dedicated executives with long spanning years in the industry.