When most Ghanaians think about taking a loan, the first thing that comes to mind is usually the interest rate.
Yet, for many borrowers, the true cost of borrowing extends far beyond the advertised interest. Facility and insurance fees, charged upfront by banks, can significantly influence the total amount a borrower pays.
Across the banking sector, retail facility fees generally range from 0% to around 2.5%, while corporate facility fees typically fall between 0.25% and 1.5%. Insurance fees for retail loans vary from 0.3% to 2%, with corporate insurance fees often slightly lower but still meaningful.
Some banks allow these fees to be negotiable, offering borrowers flexibility, while others maintain fixed minimum charges, which can make smaller loans relatively more expensive.
These upfront fees are a consistent component of total borrowing costs, unlike interest rates which can fluctuate with monetary policy. For small businesses and micro-enterprises, failing to account for facility and insurance fees can put pressure on working capital and repayment schedules.
At the individual bank level, the data shows distinct patterns. First Bank Ghana and Agricultural Development Bank charge 0% retail facility fees, while OmniBSIC Bank also charges 0% for retail loans and 0.5% for corporate loans (negotiable).
At the higher end, Stanbic Bank Ghana and First National Bank charge 2.5% for retail facility fees, and Consolidated Bank applies 2% with a minimum of GH¢50.
Insurance fees follow a similar trend. Prudential Bank charges 0.3%–0.54% for retail loans, while Republic Bank applies 1.2% on all retail loans. On the higher side, Universal Merchant Bank charges 2% flat for personal loans, Fidelity Bank ranges from 1%–1.86% for loans up to 5 years and 2.3%–2.72% for 5–7 year loans, and CAL Bank charges 1.4% for retail loans.
Some banks offer flexibility: Access Bank (0.3%–1% retail insurance; facility 0.1%–3%), Ecobank (1%–1.25% retail insurance; facility 1.25%), and OmniBSIC Bank allow negotiable fees. By contrast, GCB Bank (1% insurance; facility 1.5% with minimum GH¢60) and Zentin Bank (1% insurance; facility 1.5% with minimum GH¢2,000) impose fixed minimums, which can increase upfront costs for smaller loans.
The data highlights a competitive landscape in Ghana’s lending market. Borrowers seeking lower upfront costs may find suitable options with banks that maintain minimal fees, while those at banks with higher fixed charges face larger initial payments.
