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Ghana Lending Rates Banks cut lending for 2016

The move has been influenced by the inability of businesses and individuals to pay on time funds borrowed from the Bank.

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Frank Adu, Managing Director of CAL Bank play

Frank Adu, Managing Director of CAL Bank

Some commercial banks operating in the country are taking steps to curtail lending this year.

This, according to the banks has been necessitated by the high rates of default in 2016.

The move has been influenced by the inability of businesses and individuals to pay on time funds borrowed from the Bank.

So far Standard Chartered Bank and CAL Bank have announced their intentions to reduce the amounts of monies they lend.

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For Standard Chartered Bank, the current economic conditions have become unsuitable for massive lending.

According to Managing Director of CAL Bank, the move is to protect the profitability of the bank and its balance sheet.

"We need to have serious risk management practices in order to avoid bankruptcy or collapse. I’m not saying we’re not going to make loans but if for instance we were averaging a 40 percent loan growth every year, this year you look at it and say well, under the circumstances, until we have recovered this much, we are  going to do 20 percent.”

This posture notwithstanding, CAL Bank has been profitable, seeing its profits increase to GHC160 million representing a 14 percent increase in profits.

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