Managing Director of EDC Investments Ltd, Paul Kofi Mante, says loans in themselves are not harmful and remain a key feature of strong economies, but the real issue lies in how borrowed funds are used, warning that smart borrowing can build wealth while emotional borrowing only creates stress.

Speaking on Joy FM Super Morning Show on Thursday February 5, Paul Kofi Mante stressed that the conversation should not be about condemning loans outright but about understanding their purpose and long-term impact.

“We are not here to say that loans are bad. Borrowing is stable. When you look at strong economies and big economies, there is a lot of borrowing,” he said.

According to him, the difference between financial growth and financial distress lies in decision-making.

“Smart borrowing builds wealth. Emotional borrowing builds stress. If you borrow without a plan, you build stress. But if you borrow smart, you will build wealth.”

He explained that before taking any loan, borrowers must ask a critical question.

“You have to ask yourself: will this loan put money in my pocket or take money out of my pocket? Is it value addition or value subtraction?”

Using practical examples, he noted that loans taken to expand income-generating activities are generally good loans.

“When a seamstress buys an extra sewing or knitting machine to increase cash flow, that is a good loan. When a trader borrows during the Christmas season to stock goods and make more sales, it is a good loan.”

He added that timing and strategy also matter, especially for small businesses.

“If you borrow ahead of the rainy season to stock umbrellas or wipers, knowing demand will rise, that is a good loan. If a driver takes a loan to buy a car and repays it within months, that is also a good loan.”

Sharing a personal experience, he cited his decision to take a mortgage as an example of productive borrowing.

“I took a mortgage to buy a house and finished paying for it in seven years. When you pay rent, that money is gone forever. But every mortgage payment was helping me own the house.”

He further cautioned young people against prioritising luxury over assets, recalling the story of a wealthy man who left investments—not expensive cars—to his children.

“The children had millions of cedis working for them, yet they drove modest cars. That’s because wealth is built through assets, not appearances.”

He concluded by urging the public to rethink their attitude toward borrowing, emphasizing that loans should serve as tools for growth rather than sources of financial pressure.