Ghana’s booming mobile money loan sector faces calls to overhaul its one-size-fits-all interest model.
Financial experts and consumer advocates demand tiered pricing, arguing prompt repayers deserve lower rates while high-risk borrowers pay more.
Currently, providers charge uniform interest regardless of repayment history, punishing reliable customers alongside serial defaulters.
With mobile money accounts surging from 13 million in 2017 to over 24.5 million this year, and transactions exceeding GHS 3 trillion in 2024, analysts insist lenders hold enough data to reward good behavior.
“It’s commercially sensible and fair,” one economist told us. “Why should someone who repays early subsidize those who don’t?”
The push comes despite falling benchmark rates. Ghana’s average lending rate dropped to 27% this year, with the reference rate plunging to 19.67% in August.
Yet MoMo loan rates remain stubbornly high, fueling defaults. The Bank of Ghana recently warned that payment delays now tarnish credit bureau records, potentially blocking future bank loans.
Advocates believe performance-based rates would encourage responsible borrowing and curb defaults better than punitive measures alone.
For market trader Ama Mensah, who borrows weekly to restock vegetables, relief can’t come soon enough. “I pay like clockwork,” she says. “Shouldn’t that count for something?”
Source: newsghana.com.gh
