Banks in the country have so far granted repayment holidays of about GH¢1.6 billion loans to their customers who are indebted to them, the President of the Ghana Association of Bankers (GAB), Mr Alhassan Andani, has said.
He explained the rescheduling formed part of relief measures to support businesses and individuals directly affected by COVID-19 pandemic
Mr Andani, who is also the Chief Executive of Stanbic Bank Ghana, said firms in the services sector including tourism, hotels, schools, hospitals and transport had had their loan payments and interest deferred for up to one year to help them cope with loss of revenue during the crisis.
"Our immediate response was to secure and help businesses that have been adversely impacted by the lack of economic activities due to the restrictions on human movements within Greater Accra and Greater Kumasi," Mr Andani said at an online seminar organised by the Ghana National Chamber of Commerce and Industry (GNCCI) yesterday in Accra.
The seminar, which was the second in a series, was on a broad theme, “COVID-19: Strategies for Business Survival and Growth - II” and a sub-theme, “Financing Options to Stimulate Local Production”.
The second edition of the seminar provided members of the chamber and the entire business community with the requisite knowledge on financing options critical for their business survival and growth in this COVID-19 period.
Mr Andani explained that the first line of action adopted by the banks amid this pandemic was to provide customers who were mainly businesses with loan repayment holidays.
"Our first line of action as banks amid this pandemic was to get in touch with our customers, first of all to look at rescheduling payment of loans, in certain cases principal and interest for operators within the service sector including tourism, hotels, schools, hospitals and transport.
"These businesses were directly impacted by the restrictions on human movements as a result of the pandemic.
“So, therefore, we immediately rallied around these clients and made arrangements to reschedule their loan repayments. I can report that the total existing loans the banks rescheduled was about GH¢1.6 billion as at April 25," he said.
Reduction in rates
In response to the impact of the pandemic, Mr Andani indicated that banks were reducing their lending rates to enable businesses to have cheaper sources of funds to enhance their operations.
"In terms of the interest rates, thankfully the Bank of Ghana (BoG), through the policy rates reduction and other measures are helping to reduce the rates of the banks," he said.
He added that the banks were supposed to react to the measures by the regulator to drop their interest rates to bring some relief to their customers.
For her part, the Executive Director of the National Board for Small Scale Industries (NBSSI), Mrs Kosi Yankey Ayeh, used the opportunity to educate participants who were mainly business owners on how to access the government's GH¢1 billion stimulus package for Small and Medium Enterprises (SMEs).
She observed that just hours after the President launched the GH¢1 billion Coronavirus Alleviation Programme (CAP) Business Support Scheme, the NBSSI was flooded with applications from businesses seeking to benefit from the stimulus package.
She stated that the board received about 2,000 calls per day from individuals and businesses making enquiries on the financial support meant to cushion businesses against the impact of the novel disease.
Mrs Ayeh emphasised that an applicant, among others was expected to show proof of its membership to a recognised association, trade group or registration with the NBSSI as part of the eligibility criteria.
Lauding the introduction of the stimulus package, the President of the chamber, Nana Appiagyei Dankawoso I, noted that the government must also focus on developing industry-specific stimulus package to complement the efforts of businesses in their bid to survive and grow.
This, he explained, would ultimately achieve impact, resilience and sustainability of the entire industrial value chains, given the disruptions caused by COVID-19.
"Last week, the government launched the stimulus package for SMEs and I am also aware that plans have been made to activate the GH¢3 billion syndicated loan for the large enterprises which is very welcoming.
"Let me once again thank the government and its institutions and agencies for their proactive measures taken to curb the spread of COVID-19.
"It is unquestionable that finance is the lifeblood of any enterprise. It facilitates access to all the resources required in every business operation. In essence, a successful business enterprise is one that has an efficient management of its finances by considering the source, cost and risk of all financial decisions.
"In this regard, it has become critical for businesses to identify which financing options will be appropriate to enable them efficiently manage their capital structure and working capital," he added.