Kofi Amoabeng: BoG warned my lending method was too risky
The co-founder of the erstwhile UT Bank says he was cautioned by the BoG that his early lending method was not sustainable in the long term
Captain (rtd) Prince Kofi Amoabeng, the co-founder of the erstwhile UT Bank, has told Asaase Radio that the Bank of Ghana warned him the bank’s early method of lending was risky, well before the bank collapsed.
Speaking with Kwaku Nhyira-Addo on The Asaase Breakfast Show (ABS) on Tuesday (14 December), Amoabeng said he started out lending without collateral because he had wanted to operate a trust regime.
“… When I started, you know, the name was Unique Trust. My naive idea was that I was going to lend based on trust, not collateral.
“So the first few loans that I did, if I interviewed you, went to your business, had proof of everything, and I felt that you were genuine, then I give you the money. I didn’t ask for collateral.
“At some point when the Bank of Ghana [BoG] saw that there was a bit of turnover, they came around to inspect our books. They took about eight books and set them aside and said: ‘Amoabeng, your lending method [carries] too much risk, because it looks like you don’t go for collateral … When you have over a thousand clients, do you think you can go after all of them?’ ”
Watch the video below:
The co-founder of the defunct UT Bank told The Asaase Breakfast Show host he believes that small and medium-sized enterprises must be open to the idea of partnership, but must work to a clear business model and tread cautiously in ceding the entire business to investors.
Fred Dzakpata
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