Mr Kwaku Agyeman-Manu, Deputy Minister for Trade and Industry, Private Sector Development and PSI yesterday asked entrepreneurs to make effective contributions to the Lending and Borrowers Bill, which will soon be considered by Parliament..
The industrialists have complained about high interest rates of between 25 and 29 per cent despite a steady prime rate of 13.5 per cent. Contributing to discussions at a forum organised by the Association of Ghana Industries (AGI) to consider Financing Alternatives for Industrial Growth, Mr Agyeman-Manu said government could only make complains about the situation as was being done in different forums but had no authority to intervene directly in the market.
Besides Bank of Ghana, which had, direct supervision authority over the commercial banks, could only use moral suasion since the forces of demand and supply establish the rates. Mr Agyeman-Manu said, it was therefore important that industrialists take interest in the Bill, which could change the direction of how interest rates were determined in the country.
Mr Prince Kofi Amoabeng, Chief Executive of Unique Trust Financial Services, said although the non-bank financial institutions were making good contributions, they could not bear the huge requirement in the sector.
However, he said, it was important that, both industry and the public understood that the facilities from the non-bank financial institutions serve only as stop gap and temporary measure.
'For businesses who do not qualify for assistance from the banks, we support them and groom them to the point where they can be handed over to the banks if the business can support the market interest,' he said. Mr Amoabeng urged the industrialists to consider partnerships and joint ventures as a major means of financing their projects.
Mr Kwaku Yeboah-Asuamah, General Manager, Finance, Enterprise Life Assurance Company Limited, said insurance was also another means through which entrepreneurs could finance their activities.
These could be done through insuring the risks that industries are exposed to, through indemnity, provision of long-term capital through the sale of products that encourage savings and reserving and direct funding by way of debit financing such as commercial papers and debentures.
Nana Owusu-Afari, Vice-President of AGI said it was important that measures were taken to lower interest rates to enable businesses compete effectively with imported products.