Victor Yaw Asante, has disclosed that the absence of a collateral tracing system that enables banks to know the number of collaterals, has made various banks to be cautious when lending the non-public sector. Speaking on the role of the financial sector in post-pandemic recovery, Victor said, “When we say we are being cautious about lending to the private sector it is in terms of framework, that when you lend money, you want to get it back. If you do not have a framework that allows you to get it back, then you are worried.”
According to Victor Yaw Asante realization of the collateral is also limiting banks from lending to the private sector. “If you default and I must take the collateral back, I must go through the court system. Meanwhile, the court system also has its own issues, so it takes a while. While at it, it is still depositor’s money at play and accumulating interest. All we are saying is that until we fix the framework, we cannot lend with careless abandon,” he stated.
Besides, the CEO of FBN Bank advised that the collateral registry and credit bureaus should work together to address such issues well.