Monday, January 24

Kofi Amoabeng: BoG warned my lending method was too risky

The co-founder of erstwhile UT Bank says he was cautioned by the BoG that his lending method was not sustainable in the long-term

Captain (rtd) Prince Kofi Amoabeng, the Co-founder of erstwhile UT Bank
 Captain (rtd) Prince Kofi Amoabeng, the Co-founder of erstwhile UT Bank

Captain (rtd) Prince Kofi Amoabeng, the co-founder of erstwhile UT Bank has said the Bank of Ghana warned him of the risky method of lending prior to the collapse of the bank.

Speaking with Kwaku Nhyira-Addo on Asaase Breakfast Show (ABS) Tuesday (14 December), Amoabeng said he started lending without collateral because he had wanted to operate the trust regime for lending.

” … When I started, you know the name was Unique Trust, my naive idea was that I was going to lend based on trust, not collateral. So the first few loans that I did, if I interviewed you, went to your business, hard proof of everything and I felt that you were genuine then I give you the money. I didn’t ask for collateral.”

“At some point when the Bank of Ghana (BoG) saw that there was a bit of turnover, they came around to inspect our books, and they took about eight books and set aside and said Amoabeng your lending method is too much risk because it looks you don’t go for collateral …”

“When you have clients of over a thousand, do you think you can go after all of them?”

The co-founder of erstwhile UT Bank believes small and medium scale enterprises (SMEs) must be open to a partnership but must tread cautiously in ceding the entire business to investors.

Source: Asaase Radio 99.5
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