Address problems that tend to make credit too expensive-President Kufuor

Accra, Oct. 6, GNA - President John Agyekum Kufuor has asked the country's commercial banks to seriously address the high lending rates and other related problems, that tended to make credit too expensive. Additionally, they should take a calculated plunge into the wider segment of the relatively virgin parts of the informal sector, including small-scale enterprises.

President Kufuor, who was speaking at the inauguration of the Fidelity Bank in Accra on Friday, said they should share in the Government's vision and policy of reaching out to all segments of the society by giving them access to financial services. Now a fully-fledged bank, Fidelity used to be the leading discount house in Ghana.

A wholly Ghanaian banking institution, it is the sixth bank to be established in the country within the last six years. President Kufuor said the Government's macro-economic policies with prudent fiscal and monetary management had led to the current business-friendly environment that was attracting both local and foreign investors and enhancing businesses. "We must all feel proud of Fidelity, for being the result of local entrepreneurship. It is a good private sector initiative worthy of emulation."

He said the Government was satisfied to "see Fidelity come this far. We hope it will inspire others to live out their business dreams and creativity. There is not a better climate than now." He entreated captains of industry, commerce and borrowers generally to develop the culture of servicing their loans to safeguard the viability of the institutions they depend on for credit and other financial services to support their operations.

President Kufuor said the Credit Reporting Bill, slated for consideration by Parliament when it resumes, should provide the institutional framework to protect the interest of the banks and credit worthy borrowers to help to remove impediments to wider access to credit. The Government of the Bank of Ghana, Dr Paul Acquah, asked the banks to ensure that interest rates moved in line with inflation. He said the Central Bank had embarked on a major policy drive to establish a fully integrated payments and settlement system to help to among other things to reduce the cost of doing business. It was also moving towards risk-based supervision.

Mr Edward Effah, Managing Director and Chief Executive Officer of the Fidelity, said they had mobilised one trillion cedis of customers funds about half of which were deposits and the other half in treasury bills. Their vision, he said, was to create a truly world class Ghanaian bank in terms of their products, services, corporate governance and the value they would create for their shareholders. The Board Chairman, Mr William Panford Bray, said it would not only be a bank offering the best products and services but would also be socially responsible.