The Chief Executive Officer of the Association of Ghana Industries has proposed establishing credit reference bureaus and a collateral registry to address non-performing loans in the banking sector.
Mr. Seth Twum-Akwaboah believes that integrating these mechanisms into lending frameworks will enhance credit risk management, strengthen loan recovery processes, and improve banks’ ability to track repayment obligations.
He made the proposal during a panel discussion at the opening of the National ICT Week.
He also stated that small and medium-sized enterprises (SMEs) need to integrate digital systems to scale their operations.
“You may be a performing enterprise but once you go to a bank for loan, they are looking at the whole ecosystem. What percentage of my portfolio has gone out that I didn’t recover? So I must recover it through those of you who are paying They increase the interest rate to cover that because the Bank of Ghana requires them to cover all the loans they give out.Travel guide
“So part of the reason why cost of capital is high is because people are not performing. Digitalization can help solve some of these problems. Introduce the credit reference bureau and the collateral registry. These are all mechanisms for helping to improve transparency and ensuring that we can track individuals. If you are not performing, deal with it but your non-performance should not affect me to the extent of increasing my rate of interest,” he remarked.
He also called for a public-private partnership framework where government and industry collaborate to expand digital infrastructure.
By: Rainbowbowradioonline.com/Ghana
