The Ghana Exim bank says it has instituted stringent application processes to reduce loan defaults.
The bank was set up in 2016 to facilitate the country’s international trade by providing financial support to local companies especially SME’s.
However, the Bank of Ghana’s Banking sector report for 2018 revealed that local private businesses are the worst culprits in repaying loans taken from banks resulting in high non-performing loans within the banking sector.
In this regard the Exim Bank says it has put measures in place to avoid such a situation.
“Previous grants that were given out, we had some defaulters and we have a whole department that is mandated to recover what was given out. It’s the due diligence that our credit processing goes through,” Richard Anane, Head of Corporate Affairs and Marketing at Exim Bank told Citi Business News.
According to the Bank of Ghana, the local businesses constituted 80.6 percent of loan default for 2017 compared to the estimated 7.9 percent of by foreign businesses.
“Before we give out a facility, we would have done a very detailed thorough processes. Before we give it to you, we are sure that the funds we are giving to you will be channeled into the operations that you requested for and that you will be able to turn it round and be able to make some money and pay the principal as well as the interest,” noted Mr. Anane.
The Ghana Exim Bank which was created after government collapsed the Export Development Investment Fund EDIF, is also the main financier of government’s One District One factory program.
By Nana Oye Ankrah/Citibusinessnews.com/Ghana.