The CEO of Opportunity International Savings and Loans (Opportunity International), Mr. Kwame Owusu-Boateng, has expressed that the steady interest rate decline especially the Treasury Bill rates in recent months with a corresponding reduction in lending rates, augurs well for government’s quest to deepen financial inclusion in the country.
“We see banks interest and lending rates coming down which are good indications because businesses and individuals can now borrow at a cheaper cost. These will also enable small and medium sized enterprises which form the bulk of businesses in the formal and informal sectors to borrow at a lower rate, produce more goods and services and be able to repay their loans”. Mr. Owusu – Boateng said this at a media briefing after the Annual General Meeting of Oikocredit, a cooperative investment firm.
According to the Central Bank’s latest monthly Annual Percentage Rates (APR) and Average Interest (AI) report, the average interest banks charge on loans and advances has seen a three-time consecutive drop. The industry average for loans and advances, as at the end of March, dropped to 26.7 percent from February’s rate of 26.9 percent, which in itself was a drop of 0.9 percent from month- end January 2017.
In response to this trend, Opportunity International, being a customer centric institution has reduced its interest on all SME loans by 6% per annum to reflect the current trend of the falling interest rate. It is envisaged that as the market rates continue to drop, the institution will continue to pass this benefit back to its cherished customers through reduced interest rates.
Mr. Owusu-Boateng further stated that “with good rates Opportunity will be able to reach out to more people with same resources. There will be high repayment rates for the banks to get more liquidity. The reverse is harmful as non-payment of loans results in high non-performing loans (NPLs)”.