Banks reduce interest rate to protect Ghanaians against economic impact of coronavirus

Banks reduce interest rate to protect Ghanaians against economic impact of coronavirus

- The Ghana Association of Bankers (GAB) has reduced the rate on bank loans by 2 percent to help businesses and individuals fight COVID-19

- The Monetary Policy Committee of the Bank of Ghana earlier reduced the policy rate in order to attain the same results for customers

- GAB assured Ghanaians that the reduction in the rate would remain in place even after the COVID-19 is eliminated from Ghana

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The Ghana Association of Bankers (GAB) has announced a plan to reduce its benchmark rate by 200 basis points.

The move is an attempt to reduce the impact of the coronavirus on businesses and individuals in Ghana.

The reduction, has learned, is equivalent to 2% on bank loans and follows a 1.5% reduction in the policy rate by the Monetary Policy Committee of the Bank of Ghana.

READ ALSO: Akufo-Addo predicts Ghana's growth rate could fall from 7% to 2.5%

GAB’s Chief Executive Officer (CEO), D.K Mensah, explained that the interest rate cut affects all existing local currency-denominated loans and for all new loans to be sanctioned by member banks.

He added that the rate covers both the period in which the pandemic is present in Ghana and after it has been dealt with.

This, he went on, is because the GAB believes the banks are convinced businesses and individuals need to retool and restock to regain normalcy.

The GAB noted that it has made arrangements for its members to discuss with their clients who are indebted to them, the modalities to reach an agreement.

They, however, advised customers to exercise restraint as they are likely to be delayed because banks are working with a reduced number of employees.

GAB has nonetheless advised customers to make use of digital banking platforms so that banking halls can take charge of limited banking services.

Meanwhile, President Akufo-Addo has revealed that small and medium scale businesses in Ghana would benefit from a GHC600 million soft loan package.

According to him, the move is to protect such businesses from the economic impact of the coronavirus.

As part of a nationwide address on Sunday, April 5, 2020, he explained that the plan is to ensure that Ghanaian businesses are still functioning even though industries are affected by the pandemic.

He explained that the soft loan scheme would be implemented with the support of the National Board for Small Scale Industries (NBSSI), business & trade associations and selected commercial and rural banks.

READ ALSO: Bank of Ghana cancels charges on MoMo transfers GHC100 and below

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