The International Finance Corporation (IFC) has told Citi Business News it is committed to assisting banks in Ghana to reduce their risk of lending to customers.
The IFC, believes this can be done through the strengthening of the country’s collateral registry and credit bureau.
As at February 2018, the average interest rate at which commercial banks lend to their customers was 24.5%.
But in an interview with Citi Business News, the IFC Country Manager for Ghana, Ronke-Amoni Ogunsulire stated that, the risks associated with lending can be reduced with up-to-date data on potential borrowers.
“We know that high interest rates are a big concern for Ghanaian businesses. What we can do is that we can help make it easier for banks to lend. So when I talk about the collateral registry, the credit bureau, the training we give to Small and Medium-sized Enterprises (SMEs), all of that is to make it easier for banks to get an accurate assessment of the risk-worthiness of a client.”
She added that such measures will eventually reduce the risk of lending to SMEs and thus, reduce the lending rate eventually.
Ms. Ronke-Amoni Ogunsulire was speaking on the sidelines of the launch of the IFC’s “Banking on Women” product, which seeks to encourage financial institutions to explore the untapped opportunities within the female customer segment in Ghana.
In 2013, the IFC launched the Banking on Women Bond Program to attract greater investments to help financial institutions profitably and sustainably serve women-owned businesses.
A study titled ‘Shared Roles of Central Bank and Commercial Banks in Promoting Innovative Financing Models for Women-led SMEs’, showed that 76 per cent women entrepreneurs find high loan interest rate as the major obstacle to access to finance.
Over 70 per cent women entrepreneurs find rigidness about loan related papers as the second major hindrance to access to finance, followed by 52 per cent who see collateral requirement as the barrier.
About 14 per cent however see communication gap between lenders and borrowers as their major hindrance to access to finance.
Ms. Ronke-Amoni Ogunsulire revealed that if women entrepreneurs get access to finance like men, as well as receive similar advisory services like men they tend to perform better than the men.
At the same program the Global Head of the Banking on Women business at IFC, Jessica Schnabel also added that a program that supports women customers has to be commercial.
“Women customers are a growth opportunity. They do not need to be treated as a helpless group, they are successful leaders, they are successful entrepreneurs and can be profitable for businesses.”
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By: Bobbie Osei/citibusinessnews.com/Ghana