Don’t Take Loans for Luxury Cars – Businessmen Told
By Maame Efua Kwaduah
The Bank of Ghana has warned businessmen against using loans to buy luxury cars. It says such misuse of credit hampers business growth and pushes up borrowing costs.
The Central Bank stressed that loan facilities must be used strictly for their intended purposes, adding that responsible borrowing and timely repayment are key to sustaining financial-sector stability.
According to the BoG’s May 2025 economic and financial data summary, the industry’s non-performing loans ratio rose to 23.6% in April from 23.4% in March.
Speaking at a sensitisation programme on the Borrowers and Lenders Act for members of the Ghana National Chamber of Commerce and Industry, Second Deputy Governor Matilda Asante-Asiedu underscored that increased access to credit comes with greater responsibility. She said borrowers must fully understand the agreements they sign and ensure proper utilisation of funds.
She explained that investing borrowed funds into business expansion increases the likelihood of making profits and being able to afford such purchases in the future.
“Some people go to the bank and they take loans knowing that they will not pay back and this is what creates opportunity for higher interest because the banker then begins to think okay if 30% or 20% will not pay then let me factor that into my pricing and that means that cost of borrowing goes up,” she said.
President of the Ghana National Chamber of Commerce and Industry, Stephane Miezan, urged the Central Bank to improve access to credit as interest rates decline. He noted that the challenge for many businesses is not just the cost of borrowing but also the difficulty in obtaining finance.
He added that affordable credit has little value if businesses cannot access it. While acknowledging the Bank of Ghana’s efforts to reduce borrowing costs, Mr. Miezan appealed for more practical measures to make credit facilities readily available to industry players.
