Finatrade Group Banks threaten to seize Finatrade’s property to offset GHC1bil debt

The situation has sparked concerns it might hurt the banking sector in ways similar to what caused the collapse of two major national banks about two decades ago.

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The inability of  the Finatrade Group, one of  Ghana’s biggest commodity trading companies, to meet its financial obligations is crippling the operations of about 26 local banks in the country.

The situation has sparked concerns it might hurt the banking sector in ways similar to what caused the collapse of two major national banks about two decades ago.

Finatrade Group’s total debt to local banks currently stands at GHC1 billion, representing half of the total stated capital of GHC2.6 billion for the entire banking sector.

The situation is believed to have stifled the operations of the banks as the struggle to stay liquid.

The Finatrade Group is one of Ghana’s biggest commodity trading  businesses, with several subsidiaries in Ghana, such as Sucatrade, Akuafo Adamfo, Dry Foods, Foods Inn and CCTC embarked.

READ MORE:Bank of Ghana Full text of the Monetary Policy Committee's statement

These subsidiaries have seen massive expansion in the last five years that has significantly affected  Finatrade’s cash flow and liquidity.

In spite of a payment plan offered to Finatrade Group by the banks, the company has  not been able to redeem the debt, blaming it on bad state of business.

Reports reaching say most banks have refused to give the Finatrade Group any more credit, while others have resorted to the court of law to recover their monies.
Other banks have threatened to seize the properties of the company to offset the debt.

Finatrade’s exposure to each bank goes beyond the single obligor limit of most of the banks it dealt with. (The limit beyond which you cannot exceed in giving out loan)

Graphic Online has also gathered that the Ghana Association of Bankers (GAB) was conducting a forensic audit to establish the actual extent of the bank’s exposure to Finatrade.

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