Interest rates on bank loans is expected to drop to about 15 percent if the economic fundamentals improve, Asare Akuffo, Managing Director of HFC Bank Ghana says.
Several factors go into the determination of lending rates which include Treasury Bill Rate, Policy Rate, cost of funds, loan loss provision, administrative overhead, profit margin, competitorsï¿½ action, primary reserves and inflation in the order of significance.
But Mr. Akuffo, who also doubles as president of the Ghana Association of Bankers and president of the Private Enterprises Foundation, said the current macroeconomic environment where inflation was below 10 percent, and improved Gross International Reserves among others could push interest rates down from its high of about 27 percent on the average.
He was speaking at the third and final draw of the 2011 HFC Bankï¿½s Homesave Promotion. The promotion, which was in its fifth year running, attracted several thousands of people.
This yearï¿½s promotion was unique because for the first time home-savers and other savings account holders of the bank had the opportunity of winning three 2-bedroom houses in three separate draws. Mr. Akuffo said lower interest rates would open the mortgage and housing finance industry of which his outfit was a market leader.
He said the bank was ready to finance a major housing project in the country soon. ï¿½We have about 20,000 homesavers at the moment. When this new housing project is completed these homesavers will be given the first priority.ï¿½
Outlining further, Mr. Akuffo explained that it was an important requirement that mortgagors provided a minimum investment for lenders to support them to meet the full market prices of homes delivered by residential estate developers.
He added that the savings mobilized towards home ownership was a source for funding construction of new homes and also provision of home loans to others. The residential estate financing is a strategic growth path for the bank over the next three years. He congratulated all the winners of the promotion.
Adelaide Larissa Boi was adjudged the proud winner of the 2-bedroom house to be located at Oyarifah while Eric Quaye and Cephas Agboada went home with laptop computers. There were other consolation prizes.
Source: Daily Guide
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