Economic crunch: Some banks begin suspending loans to new customers – Report

In the wake of the current economic situation in Ghana, some commercial banks operating in the country are reported to have begun suspending loans, especially to new customers. According to a Joy Business report, the development comes on the back of the recent hike in the monetary policy rate by 250 basis points to 24.5 percent announced by the Bank of Ghana. While it did not provide further details of these banks, the portal noted that emails have since been sent to Relationship Managers and Officers of these banks directing them to put on hold lending to new customers. It explained that the move seeks to reduce risk exposure in advancing loans to new customers. Other factors which are likely to impact this decision can be attributed to non-performing loans of banks, and soaring interest rates which have forced some financial intermediaries to suspend or slow down lending especially to new customers. Although demand for loans continue to surge due to the current economic conditions in the country, supply of loanable funds remain virtually low as Ghana is seeking to access an IMF-supported programme in 2023 once an agreement is reached. Meanwhile, existing and credit-worthy customers of these banks are expected to continue to receive loans but at a much higher rate due to the recent policy rate hike. MA/SARA Watch the latest episode of BizTech below: