The Chief Executive Officer of Ghana Association of Bankers (GAB) John Awuah has urged banks to properly coordinate and collaborate to tackle the issue of financial illiteracy to help cure the low level of understanding of finance in the economy.
He said, coordinating efforts to be able to bring along actors and other market participants in the financial inclusion agenda, particularly improving financial awareness and literacy, should be of prime importance to the banks.
“If we work together, corporate and coordinate our efforts, that is when we are better able to bring along our actors and other market participants in this financial inclusion agenda, particularly improving financial awareness and literacy, which is of prime importance to the banks” he said.
He made this contribution during his presentation at the launch of the official launch of “The improving Financial Awareness and Financial Literacy Movement in Ghana” at the University of Ghana Business School (UGBS).
According to him, if the problems associated with financial illiteracy are not attended to, individuals will continue to take products that are not properly targeted and will default in return.
“If we do not tackle the problem associated with financial illiteracy, and people take products that are not properly targeted and they default, it comes to the banks as non-performing loans,” Mr. Awuah stated.
Explaining further he said, this will make the banks price the non-performing loans to its future products which increases the cost of lending. He said it then creates a cycle of financial issues that affects the bank and also the bank’s ability to deliver on financial intermediation which is the core mandate of the institution and organization.