When Ghana’s Central Bank Cracked the Whip Amidst An Unstable Sector With Too Many Banks

Ghana’s Central Bank continues in its effort to sanitize the banking sector. Notably, among some obvious sanctions it has carried out has been the mandatory takeover of two private-owned banks: Capital bank and UT bank back by the state-own Ghana Commercial Bank under the authorization of the Bank of Ghana in 2017. Other activities have been carried out by Ghana’s Central Bank yet, the sector still needs some stability. Currently, Ghana’s banking sector is unstable though its prospect looks good in the not too distant future should major regulations and activities are carried out by the Central bank.

The sector still nursing it wounds over last year sanctions on the 2 banks, yet another bank has experienced the central bank direct sanctions, thus, Unibank, (It was adjudged the 6th best performing company in Ghana at the Ghana Club 100 awards in 2017). Currently, the country`s Central Bank has announced that as at 20th, March 2017, it has mandated and authorized the Management of Unibank, ( privately owned bank) be dissolved and taken over by KPMG. Interestingly!

Now, Bank of Ghana itself needs some house cleaning. It is very unacceptable to superintend over a sector from which a player is adjudged 6th best only for it to be said to have been withholding some important data. The Central Bank, however, has its defense for the action against Unibank that the bank has persistently maintained capital adequacy level ratio close to zero which agreeably could practically mean Unibank is insolvent. Reports from the Central bank stated that it directed Unibank to desist from granting any additional new loans to customers, however, the Bank failed to comply with the directive and continued granting new loans. Also, Unibank was directed to desist from incurring any additional capital expenditures which they (Unibank) didn’t adhere to thereby, breaching section 105 of Act 930.

Admittedly, Unibank has been a creative bank if one should observe their banking activities over the years from a distance, as such, the Central bank and KPMG guide to the bank should be one that will not dissolve their positive employee-customer culture which is readily seen to be “vibrating” among their customers and bank. Unibank has some very loyal customers, with large numbers being traders. Bank of Ghana, therefore, should guide Unibank, taking into consideration the brand that exists and finding the obvious ways to revive the bank.

Having said this, the number of Universal banks is way too many for Ghana. The number should be capped as having close to 40 banks for a population of 26 million is obviously much. What needs to be done is to build the capacity of existing banks to “branch out” to customers. This can be done in two ways: expanding physical infrastructure to reaching closer to customers and expanding digital (Online/Mobile banking) infrastructure. Already existing banks should be keen on improving their service experience, getting closer to people, expanding digital means of banking and improving on banking security.

Making it clear, however, I am not in any way against the registration of banks, In fact, my position is the direct opposite as I am not oblivious of the importance of financial services to individuals and the economy as a whole. My position will pass for the opposite. My views clearly are that instead of registering new banks that with some of them operates a few branches with no superior services or infrastructures, it would be better to resource existing banks to improve their capabilities.

Finally, some of these financial institutions will have to consider merging should there be any possibility of staying profitable in business and serving customers at standards as the sector begins to become more competitive in the coming years and also especially now that the minimum capital requirement has been increased by the Central Bank to 400 million Ghana Cedis for banks, which will take effect from December 2018.

How to Get the Lowest Interest Rates While Refinancing Education Loans

Refinancing education loans might seem complicated. However, it doesn’t have to be. Refinancing is just another option to help you save money by consolidating various education loan balances into one new loan. The new education loan has a lower rate of interest and reduced monthly payments to help you repay the loan amount hassle free. Before getting the approval for refinancing, however, it is crucial to strategize. You need to have a game plan that can help strengthen your case and avail the lowest possible rate of interest. Here’s how to begin.

Evaluate Your Cost of Living

Some cities have a higher cost of living than others. Likewise, living alone or with a roommate can significantly affect your expenditures. You must understand that cost of living is an important aspect for refinancing companies to consider. Therefore, it is better to make lifestyle choices that might help you free up more cash. You can start by renting a smaller apartment or leasing out a cheaper car if you’re going to pursue higher education in a city such as Manhattan. Likewise, if you’re relocating to an inexpensive city, it is better to submit an application for refinancing at least two months after you move in. This is an important step because refinancing companies prefer candidates who have a living budget that allows them to have a stable cash flow each month to pay off the loan payments instead of those who scrap their savings.

Check Your Credit Score

There are many refinancing companies who consider the borrower’s credit score as a criterion. A good credit report does help secure a low-interest rate on both secured and unsecured education loans. You can significantly improve your credit score by paying all bills in advance in general. It is also helpful to reduce your credit card usage for a few months before submitting the application for a new education loan. There are multiple websites such as annual credit report.com, which can help you evaluate and improve your score.

Provide a Complete History

Most refinancing companies require you to provide a thorough insight into your educational qualifications and relevant work experiences. Therefore, if you’ve studied science, math, engineering or business at a reputable school, it always helps your case to include that information. Same goes for the hands-on skills and total work experience because overall, it all makes you attractive as an applicant who can continue to make the payments. Moreover, if you have a job offer in-hand, make sure to include the offer letter in your application.

Show All Income Sources

Before submitting your application, make sure you provide information on each and every source of income and not just job earnings. You can list dividends, bonuses, interest earned, and any other money-making prospects. Remember, with a higher income, you will be able to place more cash into the refinancing equation. Therefore, it helps to keep income proofs such as tax returns and interest statements. Moreover, make sure you have a current driver’s license and your private education loan statements are all correct.

Be Flexible

If you have multiple education loans and you’re not getting the best possible rate, it is better to refinance only a couple of the loans. There’s a possibility that you can avail lower interest rates with a smaller refinance balance. You always have the option to apply for the full balance later when you have better income sources or you relocate to an inexpensive location. Adding a co-signer also helps improve your chances of approval.