May 2008
EDIF reduces interest rate
In response to the reduction of Bank of Ghana’s prime rate to 16.5%, the Board of Export Development and Investment Fund (EDIF), in consultation with the Ministry of Trade and Industry, has reduced its maximum lending rate from 15% to 12.5%.
The Designated Financial Institutions (DFIs) which bear the credit risk for transactions retained the 10% interest rate spread of the maximum rate of 12.5% that the DFIs lend to beneficiaries of the fund. With this, EDIF would lend to the DFIs at 2.5% interest. Before, EDIFs maximum loan interest rate was 15%. DFIs were then provided with loans at 5% interest per annum. They in turn on-lend at a maximum interest rate of 15% per annum, thus giving the DFIs a spread of 10%.
According to the Chief Executive, Mr. T. K. Obeng, lowering of the interest rate was to make the fund be in line with the falling trend in interest rates as evidenced by the latest Bank of Ghana decision to reduce its prim rate from 18.5% to 16.5% and also to enhance the competitive position as well as comparative advantage of Ghanaians in the export market.
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