The Chairman of the Agribusiness Sector of the Association of Ghana Industries (AGI), William Agyei-Manu, has called on the Bank of Ghana and commercial lenders to urgently review loan repayment structures, particularly grace periods (moratoriums), warning that rigid repayment schedules fail to reflect the operational realities of different sectors and could contribute to rising Non-Performing Loans (NPLs).

Agyei-Manu made the call during a regional sensitisation programme on the Borrowers and Lenders Act, 2020 (Act 1052), held in Kumasi in the Ashanti Region.

The stakeholder engagement programme was a collaborative effort between the Bank of Ghana, through its Collateral Registry, the Association of Ghana Industries (AGI) and the Ghana National Chamber of Commerce and Industry (GNCCI). It was aimed at educating business owners and financial institutions on statutory rights, obligations and secured lending processes.

Speaking after the educational session, Mr Agyei-Manu praised the central bank for clarifying the rights and obligations of borrowers under Section 59 of the Act.

He noted that many private enterprise owners previously lacked adequate knowledge of the legal procedures required to execute unencumbered collateral transactions and secure credit for business expansion.

Citing findings from the association’s quarterly Business Barometer Report, the AGI Agribusiness Chairman emphasised that access to affordable credit remains one of the greatest obstacles facing Ghanaian businesses, alongside high energy costs.

“Apart from energy, access to credit is consistently highlighted in our quarterly Business Barometer Report as one of the key issues our members face. We have engaged several financial institutions regarding the impasse and how we can achieve a stress-free loan acquisition process,” Mr Agyei-Manu disclosed.

He pointed out that, prior to these regulatory interventions, many prospective borrowers faced arbitrary rejection of property assessments by lenders, who sometimes declared valid collateral ineligible without clear justification.

A major part of Agyei-Manu’s submission was the need for financial institutions to tailor moratorium periods to the specific nature of a borrower’s business.

He argued that applying uniform repayment timelines across all sectors was impractical and could undermine industrial and agricultural growth.

He cited the difference between retail and manufacturing, explaining that a trader engaged in daily buying and selling generates immediate cash flow to service loan instalments.

He contrasted this with the long gestation periods associated with industry and agribusiness, noting that a manufacturer importing industrial equipment or an agribusiness venture investing in long-cycle production may require months to ship, install and test equipment or harvest crops before generating revenue.

“This is where the question lies: How are the Bank of Ghana and the government looking at how we manage moratorium processes in this country? One of the main reasons we have high Non-Performing Loans is that borrowers’ operational concerns are rarely considered, especially regarding the convenience of repayment schedules.”

While calling for fairer terms from financial institutions, the AGI sector chairman also challenged private sector players to uphold high standards of integrity and financial discipline.

“As borrowers, we ought to be truthful to ourselves. Once we take these loans, we must ensure that we pay them back so that the credit cycle remains sustainable for others,” Agyei-Manu stated.

Meanwhile, the stakeholders expressed optimism that continued sensitisation on Act 1052 would empower private enterprises to leverage their assets effectively, navigate loan acquisition processes and scale up operations to drive national economic growth.