Banks have rescheduled over GH¢1.6bn in existing loans in addition to significant reductions in interest rates to cushion the impact of the coronavirus shock on the private sector, president of the Ghana Association of Bankers Alhassan Andani has said.
The loans were rescheduled to periods ranging from three months to one year, especially for clients in the services sector, Mr. Andani, who is also the Managing Director of Stanbic Bank, said.
Speaking at a webinar organised by the Ghana National Chamber of Commerce and Industry (GNCCI) on Wednesday, he also indicated that a boost to banks’ capital and cash reserves has made them more liquid to support businesses get through the crisis.
“At the moment, most of the banks are adequately capitalised with sufficient buffers to respond to the financing needs of the private sector and, to some extent, the public sector.”
According to Mr. Andani, banks’ immediate response to the virus shock was to help private businesses which were adversely impacted by the lack of economic activity during the partial lockdown imposed on Accra and Kumasi from March 30-April 20 to limit the spread of the virus.
“The banking sector has been very responsive and proactive to the needs of private sector businesses,” he said.
The second edition of the GNCCI’s webinar series, dubbed “Covid-19: strategies for business survival and growth”, was held on the theme, “Covid-19: Financing options to stimulate local production”.
The webinar equipped members of the chamber and the business community at large with responsible knowledge on financing options that are critical for business survival and growth amid the pandemic.
“Finance is the lifeblood of any business enterprise as it facilitates access to all resources it requires in its operations,” president of the chamber Nana Appiagyei Dankawoso I said while urging businesses to consider the source, cost and risk of their financial options.
He said it has become critical for businesses to identify financing options that can help them in managing their working capital and capital structure effectively.
“Businesses must develop an intelligent working capital cycle to address issues of input supplies, production capacity, and employee management.”
In the wake of the coronavirus shock, the Bank of Ghana announced measures to improve liquidity in the banking sector and relaxed loan classification guidelines to help manage an expected rise in non-performing loans.
Commercial banks have also set aside GH¢3bn to lend to businesses severely affected by the shock, especially those operating in the hospitality sector.