Banks and other financial institutions have been urged to diversify their operations or portfolio in the phase of the emerging impact of the Domestic Debt Exchange Programme (DDEP).
They were also admonished to lend more to the Micro Small and Medium Enterprises (MSMEs) sector which is seen as the backbone of the economy.
“Going forward, taking into consideration what happened, one key lesson is that banks must be more diverse and should channel resources to pursue MSME lending which is the private. Though the risk is inherently higher than government of Ghana’s securities the outcome for private sector leading cannot be underestimated given that it will drive the economy,” Maxwell Asante Danquah, Head of the Emerging Young Business Leaders programme said speaking at the Young Investors digest career, education and monitoring discussions on the impact of DDEP on banks: a focus on the financial statements.
Given the perceived impact of the programme on the financial landscape, he added that the time for banks to reconsider their decision of overly concentrating sources into government securities is now.
He also noted the sector must channel efforts into alternative sources while they innovate their way out of the crisis.
Head of Young Investors Fund, Ebenezer Yaw Odoom, also reiterated the need for alternative approaches and strategies. He further urged banks to take advantage of the stabilisation fund while being circumspect about where it directs their resources going forward.
He stressed that banks and the financial sector as a whole are at the center of all development hence the need to adopt pragmatic measures to stabilise to fuel growth.
“Banks’ efficiency is key in facilitating business sector growth,” he added.
Research assistant at the University of Ghana Business School, Lawrence Zikpi holds strongly that banks must step up their games and consider investing in capital projects to gain some revenue and create employment.
The Young Investors Network is an international network of student investors and industry leaders.