Chief Executive Officer of Ghana National Chamber of Commerce and Industry (GNCCI), Mark Badu-Aboagye has said that the collapse of the five banks will have big effects on Small and Medium-Sized Enterprises (SMEs) in the country but what the Bank of Ghana (BoG) did is in the right direction.
According to Mr. Badu-Aboagye, the actions of the BoG to consolidate five banks into one entity will prevent a major crisis in the financial sector.
Speaking on Happy FM’s Epa Hoa Daben show Badu-Aboagye said, “The collapse of the five banks will have big effect on the SMEs in the country because SMEs rely on local banks to survive.”
He added that, the banking sector of every country is paramount because the economy depends on it, “anything that affects the banking sector of a country affects everything.
He however called on BoG to strengthen its supervisory and regulatory mechanism, adding that, officials from the BoG and the affected banks whose actions and inactions resulted in the dire situation must be investigated and brought to book where necessary.
He also called for early initiatives to be taken to maintain confidence in the financial sector, and to ensure that private sector credit growth was unimpeded.
“Businesses need credit to expand to be able to create more and better jobs. Owing to constraints faced by SMEs in accessing long-term credit from the capital markets, banks’ financial intermediation becomes essential.”
On August 1, 2018, the BoG consolidated five local banks; Beige Bank, Construction Bank, Royal Bank, uniBank and Sovereign bank into what it calls the Consolidated Bank Ghana Limited.
In 2017 also, the Central Bank revoked the licenses of UT and Capital Banks because the liabilities of the two banks overwhelmed their assets.
By: Joseph Nii Ankrah