President of the Ghana Union of Traders Association (GUTA), Dr. Joseph Obeng has described as laughable, assertions being made that the establishment of the Ghana Traders Bank is not feasible.

According to the trading group, explanations that the Bank will not be able to reduce interest rates to as low as 20 per cent has no scientific basis hence those claims must be ignored.

Dr Obeng said this in reaction to concerns made by Banking Consultant Nana Otu Acheampong suggesting that plans to establish Traders Bank should rather be made as a credit union.

Speaking to Class Business’ Pious Kojo Backah, Dr Obeng said: “I can say that this is laughable and I don’t know the scientific reason behind this. What did they attribute to the high interest rate?

“They attribute it to the high risk, the default rate and so if you are able to minimize the default rate to the barest minimum, have you not succeeded in transferring the benefit to the one coming to borrow from you?” he asked.

He explained further that: “The fact that we are also going to minimize our interest rate which is not going to consume the capital or the monies we are lending to our customers then of course our customers will be able to pay.

“Most times the interest rate itself consumes the monies given to customers and so payment becomes difficult but if we are able to minimize the interest rate and also do away with bad loans which can be attributed to 40 percent corruption in in the bank itself i.e. the inefficiency of the bank and its inability to do the necessary due diligence and they pass it on to otherwise a very good customer and then you share the risk for all of them, how fair is that?”

He noted that with the Traders Bank, “We’re going to do away with it so it’s a simple mathematics and it’s not rocket science.”