Ghana Banks Cut 2% Off Interest Rates on Loans Over COVID-19

The Ghana Association of Bankers (GAB) has announced a number of sweeping incentives to customers in a bid to alleviate their plight during the deadly Covid-19 coronavirus outbreak, including a significant reduction on interest rates on loans.

In a statement copied to Whatsup News, the GAB says it has slashed 200 basis points on interests on all existing local currency-denominated loans for the entire outstanding tenure of these loans

“Banks agree to a general 200 basis points interest rate cut on all existing local currency denominated loans and for all new loans to be sanctioned by member banks. This rate cut shall cover not only the period of the pandemic but Banks recognise that it will take businesses and individuals sometime after the end of the pandemic to retool and restock to achieve the semblance of normalcy – the rate cut will, therefore, cover the remaining tenor of the facility,” the GAB statement read.

A basis point in finance amounts to approximately 0.001 and therefore, 200 basis points will translate directly to some 2% off the total interest rate on the loan facility.

Critics, say, the figure may appear low on its own but is significant on its cumulative effect on the loan facility.

Already, in response to the Covid-19 distress on Ghanaians who are mostly on lockdown, Banks have either reduced or removed completely charges on digital banking platforms. “Most fees on digital and other alternate banking channels have either been scrapped during this period or significantly reduced so customers do not have to make financial decisions on whether to switch to an alternate platform or not.”

Meanwhile, Ghanaian Bankers have donated some GHS10 million to support fight against the virus the amount has been stashed in a Covid-19 response fund set up specifically by the banks. According to the GAB statement, this amount will go directly towards the procurement of equipment for managing the virus, support to frontline medical staff in residence, and to ease the burden and practical difficulties some of our vulnerable citizens have to endure during this period of restriction in movement.

GAB’s fund is in sync with the government’s emergency Covid-19 trust fund which has so far received approximately GH¢8.75 million and US$600,000 from donations from companies, individuals and non-governmental agencies.