joining us on zoom a senior finance lecturer at the university of ghana business school and banking consultant dr benjamin i'm one for more insights on this development doc it's good to have you with us here on the marketplace now the commercial banks insist they are being unfairly criticized for not reducing lending rates from your assessment are these calls for drastic reduction in the interest rate justified basically

We can look at it in this case from the perspective of the banks.

The banks have the view that they are being criticized because the public is not aware of what goes into the risk premium determination and of course the margins and origination fees that the banks charge borrowers.

And if I will explain, We have the Ghana reference rate, which has replaced the base rate.

And the Ghana reference rate tried to give the industry-wide benchmark for lending.

But then each individual borrower who approaches a bank would have to go through some form of risk analysis or profiling.

Now, within that risk analysis of profiling, banks have a set of items they look out for in determining the premium or the additional rates that a bank should apply to each borrower.

This should mean that the real interest rate, should it be high? Is that the case?

From your assessment, are these calls for drastic reduction in the interest rate justified, basically?

We can look at it in this case from the perspective of the banks.

The banks are the view that they are being criticized because the public is not aware of what goes into the risk premium determination and of course the margins and origination fees that the banks charge borrowers.

And if I will explain We have the Ghana reference rate, which has replaced the base rate.

And the Ghana reference rate tried to give the industry-wide benchmark for lending.

But then each individual borrower who approaches a bank would have to go through some form of risk analysis or profiling.

Now, within that risk analysis or profiling, banks have a set of items they look out for in determining the premium or the additional rates that the banks would apply to each borrower.

This should mean that the real interest rate, should it be high? Is that the case?