Businessman Seidu Agongo has revealed that his motivation for establishing Heritage Bank was to introduce competitive interest rates, lowering them from 35% to 20%.
In a recent interview with Metro TV, Mr. Agongo explained that he ventured into banking to address the high cost of borrowing in Ghana.
“I don’t believe in the interest rates that banks charge in Ghana. It’s excessive. How can you walk into a financial institution seeking a loan and be charged 35% per annum? Some even charge as high as 5% per month,” he lamented.
He further argued that such exorbitant rates are unsustainable for businesses.
“No matter the justification, it doesn’t make business sense. Business is about continuity, and when banks take so much from borrowers, they become dependent on them, limiting their ability to reinvest and grow. If businesses can’t grow, how does the bank grow?” he questioned.
Agongo emphasized that his goal in banking was to offer the lowest possible interest rates to Ghanaians and business owners seeking financial support.
“Imagine if all banks were charging 35% and I charged 20%. The rest would have no choice but to bring their rates down,” he stated.
A Call for Indigenous Banking Solutions
Mr. Agongo proposed empowering indigenous financial institutions to offer competitive rates, which would naturally force industry-wide reductions.
“Let’s support one indigenous bank to set interest rates at 20%, and it will disrupt the entire banking sector. Why should someone take a loan at 35%? Why should a borrower be required to undergo medical tests before securing a loan? Meanwhile, foreign companies are given open checks with little scrutiny,” he argued.
Stock Market Failures and the Reliance on Banks
He also pointed out the weakness of Ghana’s stock market, which leaves businesses with no alternative but to rely on banks for financing.
“Apart from South Africa, the sub-region lacks a credible stock market. Look at the U.S., Japan, and Singapore – their stock markets are strong. Elon Musk is the richest man in the world today, yet he owns less than 15% of his company’s shares. His value is derived from the stock market. But in Africa, the stock market is virtually collapsed. Even when companies list, nothing happens, forcing businesses to depend on banks that charge 35% interest – and sometimes even require an HIV test before granting a loan. What kind of system is this?” he asked.
Heritage Bank’s Vision and the Future of Banking in Ghana
According to Agongo, Heritage Bank was established to fill these gaps and revolutionize banking in Ghana.
“Heritage Bank was designed to address these inefficiencies so that, within a decade, we would become a formidable force in the sub-region. That was the vision because the need is clear,” he said.
He also advised banks to mentor and support young entrepreneurs, offering guidance and investment instead of solely focusing on high-interest lending.
“Banks should establish mentorship desks staffed with experienced businesspeople who can guide, invest in, and nurture young startups—even if they ultimately don’t qualify for a loan.”
Heritage Bank was among nine local banks closed by the Bank of Ghana during the Akufo-Addo administration.
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