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05.11.2008 Business & Finance

Interest Rates Still Too High - Says Akyeampemhene

The Akyeampemhene, Oheneba Adusei Poku , has challenged financial institutions in the country to initiate prudent measures that would reduce interest rates in the country to the barest minimum .

This, he explained, would induce many businessmen and potential investors to do business with them.

He pointed out that the current interest rate, which hovers between 25 and 27 per cent, was too high to attract large numbers from the business community and investors to borrow from the financial institutions to operate successfully.

Oheneba Adusei Poku made the remarks at the inauguration of the Ghana Commercial Bank (GCB) Tech- Junction branch at the Kwame Nkrumah University of Science and Technology (KNUST) last Monday.

The chief pointed out that the outrageous interest rate charged by the financial institutions also militated against effective and efficient growth of small and medium scale industries in the country.

He wondered how the small and medium scale industries could grow at a faster rate as expected if financial institutions supposed to nurture them developed unattractive products that undermined their growth.

The branch, which is the second by the bank on the KNUST campus, brings to 144 the number of branches opened by the bank nationwide.

Oheneba Adusei Poku who chaired the function commended the bank for constructing such an edifice at a strategic location, and urged management to provide quality and efficient service to customers.

He said it was equally important for them to address its corporate responsibilities by supporting the Otumfuo Educational Fund designed to support brilliant needy students to develop their talents in a more effective and efficient way.

He explained that the fund, which had provided financial assistance to over 4000 students since its inception ,was complementing the government's gesture of making education more accessible to the youth to enable them to unearth their potential.

Oheneba Adusei Poku noted that financial institutions, including the GCB, had made substantial contributions to the fund "but we ask for more because the fund should be sustainable to enable us to continue supporting needy students".

In an address, the Vice Chancellor of the KNUST, Professor Kwasi Kwafo Adarkwa, said the opening of the new branch would augment and improve the services rendered to the university community.

He urged the management to initiate products that would " satisfy the growing needs of the market without compromising standards.

He pointed out that operational efficiency and enhanced services by the bank are some of the initiatives that would enhance the bank's operations.

In his speech, a member of the Board, Mr Franklin Kwabena Asamoah, noted that GCB's contribution in the agricultural sector, manufacturing, industries, mining and commerce, among others, were impacting positively on the national economy.

He said the bank had also integrated the Small and Medium Scale Enterprises (SMEs) into its financial scheme, making it possible for them to employ many youth in the sector, thereby contributing to reduce the unemployment rate in the country.

Mr Asamoah said GCB had also made substantial contribution to revenue generation by the government in the form of tax and dividends paid over the years.

"A lot of activities, including commodity financing, trading in treasury bills and bonds to manage government debt, effective deposit mobilisation, channelling of funds to productive sectors of the economy, were some of the contributions of the bank towards national development".

Story by George Ernest Asare.