Demand for loans expected to rise – BoG

The latest credit condition survey conducted in October 2020 has indicated that demand for loans over the next two months is expected to increase.

According to the survey, a net easing in overall credit stance on loans to enterprises and households has led to the recovery in economic activities post lockdown.

This was revealed by the Bank of Ghana Governor, Dr. Ernest Addison at the Monetary Policy Committee (MPC) press conference on Monday, November 23, in Accra.

The banking sector remains liquid, profitable and well capitalised with strong buffer to withstand adverse shocks and support the country’s effort from the pandemic,” he added.

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According to the MPC report, the banking sector recorded an increase in deposits and investments this year.

The interbank lending rate has declined to 13.6% as against 15.2% in 2019 whereas the lending rate of banks to households and businesses has also declined from 24% to 21% this year.

Improved consumer and business confidence, and strong liquidity flows have helped to deliver a faster than expected recovery in economic activities. These flows include payments to contractors, SDI depositors, clients of SEC licensed fund managers, micro and small businesses loans provided by government through the National Board of Small Scale Industries, and the policy and regulatory reliefs to banks and SDIs,” Dr. Addison said.

The MPC noted that the economy has generally improved since September this year with a decline in inflation, stable deficit account, stable crude oil prices and continuous inflow of remittances.

Source: Fauzeeya Jamal-deen