Good News As Bank of Ghana Sends Out Warning Message To Savings and Loans Companies -SEE DETAILS
Savings and Loans Companies have been warned by the Bank of Ghana (BoG) about rising interest rates and non-performing loans on their books.
Osei Gyasi, the Head of Banking Supervision, explained the hazards of raising interest rates by pointing out that the practice could result in financial problems that could impair profitability.
The finance officer claims that the central bank is quite concerned about this situation since it is concerned about the caliber of financial assets.
The central bank has recognized some of these occurrences, which must be remedied as quickly as possible, he informed shareholders and customers.
“We have observed some marginal increases in Non- Performing Loans”, he said adding that “companies should manage this to improve the asset quality and enhance the profitability of their institutions.
“Savings and Loans companies will also have to diversify their funding sources to reduce the leverage ratio and also cut down interest cost otherwise, financial risk could crystalize. So these are the areas companies should be looking at to make more profit for shareholders, to improve customer confidence and profitability so they can lend more to grow the economy”, Osei Gyasi said while delivering his speech at the launch of the 20th anniversary of Bayport Savings and Loans in Accra.
Osei Gyasi recommended financial service providers to diversify their funding sources as a way to lower the high cost of loans.
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