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“War On Interest Rates” Misplaced   
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The central bank’s ‘forceful’ directive for banks to cut down interest on their lending is not doable, as interest rates are determined by market forces and not a deliberate attempt by financial institutions to rake in windfall profit, Mike Oyemade Osikoya, a chartered accountant and Chief Executive of Mikensys Consult, has said.

Speaking to the B&FT in an interview on the sidelines of a customer appreciation dinner organised by Nationwide Microfinance Company Limited in Accra, he said government must rather consider cutting down Treasury bill rates to stir market reactions and automatically drive down interest rates.

“It is wrong for anyone to ask the banks to lend below the prevailing T-bills rate; nobody can do that unless you want the financial system to collapse.

“This is because, practically, financial institutions look to the Treasury bill rates as a gauge to set interest on their lending to clients; if it comes down, then all other rates will automatically be adjusted to it,’ he said.

Mr. Osikoya indicated that the ideal practice in these times is for government to engage players in the market to discuss workable solutions so as to arrive at manageable rates.

One of such solutions, he said, would be for the Bank of Ghana (BoG) to cut down the T-bill rates from the current 25 percent to about 15 percent to stir market reactions that will automatically keep interest rates on the low.

“What is going to happen is that because financial institutions use the T-bill rates to measure their lending rates; if it comes down, then all other rates will come down.

 “For instance, given that the T-bill’s rate currently hovers around 25 to 26 percent and depositors are asking for two percent above this rate, that pushes the interest rate to 27 percent. So, obviously, you don’t expect somebody who has bought money above T-bills rate to come and sell it below that,” he stressed.

Dinner and awards night
Nationwide Microfinance organised the dinner and awards event to appreciate its cherished customers for their dedication and loyalty that has sustained the continual growth of the company in its five years of operation.

The event also provided a platform for management and top hierarchy of the company to deepen bonds with clients in the informal business sector, as a testimony to their resolve in maintaining a mutually beneficial relationship.

It was the climax of a week-long activity to mark the microfinance institution’s fifth anniversary celebrations.
CEO of the Association of Ghana Industries (AGI) and a board member of Nationwide Microfinance Ltd., Seth Twum-Akwaboah, shared with B&FT the event’s significance: “Nationwide Microfinance started as a small company with very small numbers; today, it has grown with branches spreading across the country.

“With increasing investment volumes and deposit rates rising rapidly, it is obvious that the company has thrived and survived through the turbulent times of the economy. Today, we are contributing significantly to job-creation in the country.

“We have grown strongly and it is significant to celebrate our cherished clients for their dedication and commitment.”

Chief Executive of Nationwide Microfinance, Joseph Edu-Quayson, attributed the company’s sterling performance to the support of staff and customers.

He said the company will continue to deploy core values of professionalism and superior customer service, as well as invest heavily in technology to ensure the company attains a Savings and Loans status by end of the year.

Nationwide Microfinance has seen significant growth over the last five years of operations from a humble beginning, with current turnover hitting GH¢15million from GH¢5,000 in 2010 while total assets now stand at GH¢45million.

Within the same period, the company has disbursed a total of GH¢25million in loans to clients, help them expand their businesses and making them financially independent.

Source: B&FT

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