Banks in the country are ready to finance projects and programmes in the private and public sectors with potential to revive the economy irrespective of COVID-19 prevalence, panellists at the fifth edition of the B&FT-organised Ghana’s Most Respected CEOs Breakfast Series, have said.
The panel, made up of bankers, economists and analysts in the financial sector, have stressed that despite COVID-19 – which has made banks extra careful in scrutinising loans and advances, big corporates, small and medium enterprises (SMEs) and individuals are able to access loans without too much hassle.
“COVID-19 or no COVID-19, banks are ready to support bankable projects. What COVID-19 does is that you will recalibrate your risk models and make them COVID-19 resistant. Today, despite COVID-19, business is going – albeit with precautions. So, we have recalibrated the way we interact; and it is the same way with banking and lending.
“We are ever-ready to fund bankable projects, and I believe the banks will play that role of helping revive the economy despite the Coronavirus pandemic,” Daniel Addo, Managing Director of Consolidated Bank Ghana (CBG), said at the webinar which was held under the theme ‘Bringing the Economy Back to Life: The Role of Banking and Finance’.
Already, government has launched an ambitious GH¢100billion economic recovery programme dubbed ‘COVID-19 Alleviation and Revitalisation Enterprises Support’ (CARES) aimed at stimulating large industries to enhance job creation and foster economic revival. Out of the GH¢100billion, government says, the private sector led by banks and financial institutions will provide GH¢70billion of the finance with government providing the other GH¢30billion.
This points to the crucial role banks will play in reviving an economy that is almost on its knees and requires ambitious and drastic moves to bring it back to life. Despite the tall order, bankers are stressing that they have the capacity to help revive the economy without posing debilitating risks to their survival.
John Awuah, Deputy Chief Executive Officer of the Ghana Association of Bankers (GAB), adding his voice to the role of banks in reviving the economy, stressed that the banking and financial services sector remains critical to any recovery programme aimed at bringing the economy back to life.
According to him, the industry recognises it has a key role to play in any form of economic recovery, and as such stands ready to support all efforts at resuscitating the economy from the devastating impacts of the Coronavirus pandemic.
“We take cognisance of the fact we are a key sector in any kind of recovery programme that this country takes, and banks take that responsibility very seriously,” he said, noting that since outbreak of the virus in the country, banks have undertaken debt re-profiling and restructuring and debt repayment extension for customers – in addition to the GH¢600million support toward government’s stimulus package for small businesses.
Mr. Awuah opined that banks could have easily retreated into their shells and hoped the pandemic passed quickly, but were rather at the forefront of the fight by donating to various charities and funds to fight the virus in addition to the intervention for their clients.
“Even for legacy lines that were available, the most sensible thing during crisis and uncertainty is for banks to say ‘we are holding to credit but we allowed customers, who have legitimate need, to draw down on lines that had been approved and conditions had been met’. So, on the whole, the industry has responded positively; and we know that as events unfold banks will have to recalibrate their response,” he added.
On SME support, Mr. Awuah noted that the industry is in talks with government to expand credit lines to SMEs that are in dire need of capital, and those with potential to produce goods and services to combat the virus.
“The industry is in discussion with government; we have had several meetings with the Minister of Finance and his team, trying to understand exactly what government’s programme is in terms of support for the SME sector and, in fact, entire economic resuscitation programme. Given that those plans have to be funded, they also have to be made bankable so the interest of banks can be whipped-up and we can convert our interest into proper action by sanctioning loans to the SME sector.
As an industry, we are in the final stages of sending a proposal on how best SME financing should be handled to the Ministry of Finance for consideration and review. Banks have not closed the taps; what we are doing is to lend with our eyes very wide open, but we are not saying no to any business; we are doing business as usual,” he added.