Gov’t borrowing at 25% keeps interest rate high – Databank boss

The Chief Executive of Databank Group Kojo Addae-Mensah has said government continues borrowing at 25 percent is the cause of high interest rates among banks in the country.

According to the CEO, government must, as a matter of urgency, lower the interest rate regime at which it borrows to enable local banks also lend to businesses at cheaper rate.

Speaking to Journalists on the sidelines of the bank’s 25th anniversary launch in Accra, Mr Addae-Mensah said when interest rates are high, the ability of businesses to pay back loans become difficult.

When asked government’s intention of organizing a forum to roll out intervention to keep interest rate low, the CEO said “you can talk as much as you want; you got to act, we all know the solutions already, there is no need for seminars. The truth is government continues borrowing at 25 percent is very high so let it drop and borrow at 10 percent so that banks can lend to businesses at 15 percent but if government continues, then banks will lend at 30-35 percent”.

In an address on the 25th anniversary, Addae-Mensah noted that Databank has survived due to its high integrity, professionalism and excellence it has demonstrated over the period.

“We have survived the environment for the past 25 years by our values, leadership, integrity, excellence and God at the corner, we’ve always done it to the glory of God but integrity is key. In our kind of industry if you throw away integrity you cannot survive, it’s all about knowing what you’re about. We train our staff and recruit the best of staff from the brightest finance schools and does the job well,” the CEO recounted.

He also stressed that Databank in its business delivers what it promises to its customers without cutting corners and that has been the strong foundations of the bank.

Mr Addae-Mensah however disclosed that Databank as an investment banking institution has partnered Women’s World Banking to roll out innovative product where clients with its investment as a collateral can borrow and use its constant source of income to pay off the loans. This he said was a means of responding to the needs of its clients.