Interest Rates Still High
04 April 2011
The Minister of Trade and Industry, Ms Hannah Tetteh, has stressed the need for banks to review their interest rates to reflect the downward trend of inflation and the prime rate.
Speaking at the grand draw of the Fidelity Bank “Go for Gold Promotion” she argued that the cost of doing business in the country was relatively high due to the high interest rate.
“Lending rates remain high despite consistent decline in the prime rate. The spread between borrowing rates and lending rates are still quite wide,” she said.
She said the high interest rate posed a great risk to existing business as well as new entrants.
Ms Tetteh said although the government appreciated the fat that banks played critical roles in the development of the economy, it was concerned about the high interest rate.
The Minister said although the government appreciated the fact that banks played critical roles in the development of the economy, it was concerned about the high interest rate.
The Minister entreated banks particularly, Fidelity Bank to develop new products to attract more customers to the bank, especially those in the rural areas.
She said it was estimated that banks in the country could only reach about five per cent of all households. “There is the need for banks to design appropriate financial products targeted at rural folks, and thereby attracting them into the banking system”, Ms Tetteh stated.
The Trade Minister regretted that most of the banks were not taking advantage of the mortgage market to expand their business portfolio. Ms Tetteh lauded the bank for coming out with the “Go for Gold” promotion to reward its customers.
The Managing Director of Fidelity Bank, Edward Effah, in his address said the “Go for Gold” promotion, the first of its kind in the banking industry, was to attract the unbanked in the country to have access to the banking services.
He said the company decided to give gold as the ultimate prize for the promotion because it was an asset which had the tendency to appreciate in value over time without depreciating in value, therefore giving the ultimate winner a long term wealth tha will benefit the person and create wealth for generations unborn.
The Managing Director said with the increasing strength of the Chinese economy globally, Fidelity Bank would soon launch an Asian Desk at the Corporate Department of the Bank.