Commercial banks, Women Development Bank are not the same

 A Professor of Finance and Dean of the University of Cape Coast School of Business, John Gartchie Gatsi, has lauded the intention of the flagbearer of the National Dem­ocratic Congress, John Draman­iMahama, to establish Women Development bank.

“The concept of Women Development Bank is not new globally. It has been established in countries such as India to internationally support women entrepreneurs to create and sus­tain enterprises and to deal with poverty. It has been established that generally, Micro, Small and Medium-sized enterprises (MS­MEs) established and managed by women have the chance of survival to grow and provide jobs,” he said.

Speaking in an interview in Accra yesterday, Prof. Gatsi said Development banks in general were different from commercial banks, explaining that “The latter grants mostly short term loans with high interest rates putting burden on recipients”.

This creates great interest burden and difficulty for the growth of business. The best way to reduce poverty drastical­ly is through the provision of development credits to women entrepreneurs.

“The promise by John Mahama and Prof. Jane Opoku Agyemang to establish a Wom­en Development Bank is timely and perhaps thoughtful. Women Development bank is an inten­tional strategy to economically empower women in the country to get access to long term credits at either zero interest or lower interest rates than commercial banks,” he said.

He said, “Normally, since Women Development bank is a special class of development bank, it normally receives seed money from international devel­opment and financial institutions, domestic government, foreign governments, foundations and non-governmental organisations. There are people who are con­cerned about the zero interest or low interest charge by indicating concern about the survival of the bank. We have even seen some on lending development facilities in agriculture and other sectors through the normal commercial banks.”

“In such a case the interest rates are very low. So the setup and operation of a development bank is different from that of a commercial bank. The zero interest loan portfolios of the development bank will attract interest from Islamic Develop­ment bank. Some people also say why women? Is it not discrimina­tory? We have been dealing with women empowerment, equality and inclusion in leadership for a longtime,” Prof. Gatsi said.

 BY KINGSLEY ASARE