Debtors of financial institutions have been admonished to avoid creating situations for bad loans by paying back loans facilities to create access for suitable borrowers who may want to acquire such facilities to establish and expand their businesses to improve their living conditions as well as grow their businesses to improve the economy of the country.
Bad loans arise when the borrower no longer pays in accordance with the terms of the loan creating a negative impact for the bank’s profitability, leading to credit losses and, at worst, default.
Addressing the 10th Annual General Meeting (AGM) of the Microfin Rural Bank in Winneba on Saturday October 28, 2023, the Effutu Municipal Chief Executive, Hon. Alhaji Zubairu Kassim said that banks have a central role in the economy as they provide credit, accept deposits, mediate payments and help customers manage risk. These services according to him were essential to long-term economic growth.
He bemoaned the practice where borrowers default in the payment of loan facilities granted them by the financial institutions leaving them to struggle with high levels of bad loans which negatively affect their function in the financial system with an adverse impact on economic development and financial stability.
Hon. Zubairu Kassim lauded the giant strides made by Microfin Rual Bank in the past ten years of its existence with assistance to small and medium-term businesses in the country to grow by lending soft loans to individuals and groups in communities in their operational areas.
He appealed to the Bank to support government efforts at building a strong and resilient financial sector by adhering to the rules set out for their operations by the Bank of Ghana.
Presenting his report at the AGM of the Bank, the Chief Executive Officer, Mr. Samuel Bentum noted that the Bank recorded a sterling performance in 2022 in spite of the difficult macroeconomic challenges of the country at the time.
He said the bank continued its vision of creating value for shareholders and excelled in all the key performance ratios of the banking sector.
According to him, the Bank recorded a total gross loan of GHc 10,950,656.00 as at December, 2022 with a portfolio of its groups amounting to GHc 8, 222, 656.58, representing 75% of the total gross loan portfolio.
Encouraging shareholders to increase their shares to help the Bank generate more capital to take advantage of the new business opportunities, Mr. Bentum intimated that as announced in 2021, the Bank had again declared dividends for the 2022 financial year and was working towards achieving a similar stride in the year ending 2023.
STORY BY: CHARLES BAAH ABOAGYE -ISD
Last modified: October 28, 2023
