{
  "id": 19592769,
  "title": "120% collateral requirement shuts businesses out of credit — AGI",
  "url": "https://urgent.news/2026/11/12/120-collateral-requirement-shuts-businesses-out-of-credit-agi",
  "topic": "world",
  "section": "World",
  "published": "2026-11-12T03:23:16.000Z",
  "source": {
    "name": "MyJoyOnline Ghana",
    "slug": "myjoyonline-ghana",
    "url": "https://www.myjoyonline.com/120-collateral-requirement-shuts-businesses-out-of-credit-agi/"
  },
  "original_language": "en",
  "account": "Eric Defor, Chairman of the Economic Affairs Committee at the Association of Ghana Industries (AGI), expressed concern over businesses' ongoing difficulties in securing bank loans, despite improved financial sector liquidity and declining interest rates. He emphasized that banks' high collateral requirements, often exceeding 120% of the loan amount, hindered businesses' ability to obtain credit for expansion. Defor highlighted the need for the government to address these constraints as it prepares the 2027 Budget for Parliament, acknowledging some of the government's economic interventions, including VAT reforms, which he claimed reduced production costs. He also praised the Bank of Ghana for maintaining economic indicators in check, though he noted that these improvements were the result of various measures. Defor questioned whether the funds available in banks were reaching businesses in need of financing to support production, suggesting that while banks are well-capitalized, accessing these funds on affordable terms remains challenging. He pointed out that stringent lending conditions, including substantial collateral demands, were major barriers to obtaining loans. Defor called for clearer guidance on which sectors receive bank credit and expressed worry that funds might be directed into government securities instead of business lending. He underscored that reliable data was necessary to track where the money was going, particularly considering the Bank of Ghana's liquidity management operations, which influence the available funds for commercial banks. His remarks come as businesses anticipate the 2027 Budget for potential measures to enhance access to finance and support investment in production. Despite lower interest rates and reduced production costs offering some relief, Defor stressed that the benefits would be limited unless businesses can meet the stringent lending conditions.",
  "summary": "The Chairman of the Economic Affairs Committee of the Association of Ghana Industries (AGI), Eric Defor, has raised concerns about the difficulty businesses continue to face in securing bank loans, despite improved liquidity in the financial sector and a decline in interest rates.",
  "key_points": [
    "Businesses face 120% collateral requirement for loans, hindering expansion.",
    "AGI Chairman Eric Defor calls for government intervention in budget.",
    "Banks well-capitalized but stringent lending conditions limit credit access."
  ],
  "editors_take": "Excessive collateral demands effectively nullify the benefits of declining interest rates, forcing local businesses to seek government intervention to bridge the gap between bank liquidity and industrial expansion.",
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}