Mr John Awuah, the Chief Executive of the Ghana Association of Bankers, has asked businesses seeking loan from Commercial Banks to read thoroughly the offer documents about the facility before appending their signatures.
He said most loan seekers hurriedly endorsed the loan contract without reading the documents only to realise that they had committed themselves to an agreement they did not understand.
Mr Awuah gave the advice during a meeting of the Accra Chamber of Commerce and Industry in Accra.
The meeting was to enable the CEO of the Association help the Chamber explore the possibilities of making access to finance easier and affordable for members.
He said the offer letter, which business loan seekers were supposed to read and study carefully, would clearly indicate the fees involved, interest rate and processing fees.
Mr Awuah said many a time customers for lack of time do not go through the terms and conditions associated with a loan facility and go ahead to sign it.
“Sometimes the covenant we are signing on to we do not care about it,” he added.
The CEO said this go a long way to demonstrate whether they have even have the interest of repayment of the loan.
He said this was because sometimes banks also make mistakes and may have profess wrong solutions or the repayment might not be comfortable with their cash flow as may be discussed at the initial stages.
Mr Awuah said banks had to take it upon themselves to make businesses understand the circumstances of their operations if they really needed the funds or not before disbursements.
He urged business Associations to have the necessary structures to ensure access to funding from the Development Bank of Ghana.
He said sometimes businesses might not need funds or bank facilities but rather the right networking and collaboration to solve their challenges.
Nana Kwame Agyenim Boateng, the Chairman the Accra Chamber of Commerce and Industry, said the current economic challenges had contributed to deepening the woes of many businesses.
He said the situation had therefore elevated access to finance to the top of many businesses in their fight to recover from the COVID-19 pandemic.
The President said banks and the business community had often been at the crossroads with regard to the cost of lending taking into consideration the interest rate, stringent collateral security requirements, the demand for keeping proper books of accounts and easy access to foreign currency.
He expressed the hope that the meeting would also provide the platform for the Association to engage and get feedback from their key patrons.
Nana Boateng called on entrepreneurs to also improve on their borrowing culture by paying their loan facility on time and avoiding defaults.