Accra, November 9 – The Bank of Ghana (BoG) emphasizes the importance of careful consideration for loan guarantors, urging them to thoroughly assess the borrower’s ability to repay before endorsing any credit or loan facility.
The Central Bank emphasizes, “Bear in mind that as a guarantor, you assume the responsibility to repay any outstanding loan balance in the event the borrower is unable to fulfill the loan obligation.”
As part of its financial literacy initiative, the regulator underscores that guarantors carry both legal and financial obligations to settle the remaining loan balance if the borrower defaults.
A loan guarantor, defined as an individual vouching to pay a borrower’s debt in case of default, faces the crucial task of evaluating the borrower’s capacity to repay the loan along with accrued interest.
The notice advises against hasty guarantees, urging potential guarantors to carefully review the loan agreement, ensuring a clear understanding of the terms and conditions before committing.
The Bank cautions guarantors against relying solely on verbal assurances or personal relationships with borrowers when guaranteeing loans. Stressing the importance of due diligence, it reminds guarantors that commitments come with legal implications. In times of uncertainty, seeking independent legal and financial advice before agreeing to guarantee a loan is strongly recommended.