Audio By Carbonatix
Banking in Ghana has become a paradox. Financial institutions encourage us to deposit and save with promises of security and tomorrow’s comfort. Yet when that tomorrow comes and an entrepreneur approaches the bank for capital, the doors rarely open. Collateral demands are unrealistic, interest rates are punishing, and the process itself is often designed to discourage.
Instead of supporting enterprise, banks prefer the comfort of government Treasury bills and bonds. These instruments provide high returns with little risk and spare banks the responsibility of evaluating businesses. The result is tragic. Banks thrive on so-called risk-free paper while entrepreneurs, who could generate jobs and build industries, are starved of capital. Meanwhile, government borrows not to build factories or transform infrastructure, but often to fund recurrent expenses, salaries, and projects chosen for politics rather than productivity.
The cycle has become parasitic. Citizens and businesses deposit their money with the expectation that it will be used to fuel growth. Instead, those funds are lent to government, which uses them to stay afloat, not to build. The private sector is left stranded and innovation stifled.
But entrepreneurs and trade associations need not remain helpless. If banks will not play their role, then we must take bold steps to finance ourselves. Groups of business owners can pool resources to create viable cooperatives that fund common-use facilities and infrastructure. For instance, if one hundred hotel owners each invested in ten rooms, together they could build three large hotels of more than three hundred rooms each along Ghana’s best beaches, the Volta Lake, or other prime sites. Shared ownership would spread risk, reduce cost, and achieve a scale no individual could attempt alone.
Beyond such ventures, trade associations can go further and establish cooperative banks of their own. A Hoteliers Cooperative Bank, a Farmers Cooperative Bank, or a Manufacturers Cooperative Bank could ensure that savings within a sector are reinvested in that sector. Unlike commercial banks that chase government paper, these cooperative banks would understand the realities of their industries and design lending terms that make sense for their members. Capital would finally circulate where it is needed most.
This is how finance can return to its original purpose, which is to enable enterprise and support development. Waiting endlessly on banks that prefer the safety of state borrowing is a path to nowhere. Cooperative financing and cooperative banking offer a way forward.
If Ghana is to break the cycle of parasitic banking, then collective entrepreneurship must become a movement. Our industries must learn to fund themselves, to trust themselves, and to grow together. Only then will we build the inclusive and sustainable economy that we deserve.
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