Ghana’s financial landscape has seen a notable easing of interest rates in the formal banking sector this year, with benchmark rates falling sharply. But millions of Ghanaians relying on mobile money and micro-credit loans continue to pay very high borrowing costs, a trend that has not changed even as the Ghana Reference Rate (GRR) tumbled by nearly 40 percent between January and October. This divergence highlights a deep divide in how formal and informal credit markets respond to macroeconomic shifts and raises critical questions about affordability and consumer protection.
Mobile Money loans, often called MoMo loans or micro-credit loans, have grown rapidly in Ghana. They offer fast, often unsecured credit directly to mobile money wallets or through digital loan apps. For many low-income earners, traders and students, these products provide the only quick access to cash when emergencies arise or cash flow is tight. But the convenience comes at a steep price.
Available data from market research and Ghanaian loan app trackers shows that most mobile and micro-credit loan providers charge monthly interest rates ranging roughly from 5 percent to as high as 15 percent per month, depending on the app and the borrower’s profile. Apps such as Fido typically charge between 8 percent and 15 percent monthly, while MTN QwikLoan is widely reported with a flat fee rate near 6.9 percent per month. Other digital lenders advertise rates starting around 5 percent per month or more. These rates do not include penalties, hidden fees or escalating costs for late repayment.
To put these figures in perspective, a monthly rate of even 6.9 percent translates to an annualised borrowing cost of about 82.8 percent when compounded, far above the reference rate of roughly 17.86 percent and generally exceeding the average bank lending rate of around 22.22 percent seen in October. Most mobile loan platforms, however, do not quote annual percentage rates (APR), a practice required for licensed lenders under the Borrowers and Lenders Act, 2020, meaning borrowers rarely see the true cost of credit upfront.
The persistence of high mobile credit costs stands in stark contrast to the broader trend in Ghana’s financial system, where benchmark and bank lending rates have been trending downward. This year, as the Bank of Ghana guided monetary conditions looser and the Ghana Reference Rate plummeted from 29.72 percent to 17.86 percent, banking sector lending rates also eased, though more slowly. Yet mobile loan costs appear largely insulated from these shifts, remaining stubbornly high. Experts warn this creates a “two-tier” credit environment in which the poorest, those most reliant on digital micro-credit, pay the highest cost for borrowing.
Critically, not all mobile credit providers are regulated financial institutions. A Bank of Ghana notice published this year listed dozens of unlicensed mobile loan apps operating in the country, many of which offer loans outside of formal regulation. Because they are not supervised like banks or microfinance institutions, these apps are not subject to the same rules on annualised interest disclosure or consumer protection.
Consumer advocates and financial analysts have decried this regulatory gap. “Many mobile loan platforms charge interest on a monthly or short-term basis, with little transparency on annual costs,” said a Ghanaian financial sector analyst familiar with digital lending dynamics. “This undermines financial inclusion, because those who can least afford expensive credit are forced into high-cost borrowing that does not reflect broader improvements in monetary conditions”.
Reports from local investigations also point to predatory practices among some mobile lenders, including hidden fees and aggressive debt collection tactics. Borrowers have described pressure from apps that access personal contacts or data as collateral pressure, an issue underscored by warnings that unlicensed loan apps can compromise privacy and safety.
Ghana’s regulatory framework does require that banks and Specialised Deposit-taking Institutions (SDIs) calculate and disclose interest on an annualised basis, but mobile loan apps, many operating outside formal licensing, typically quote only monthly or per-cycle rates, offering little clarity on longer-term cost implications. This obscurity means a borrower could be unaware that a 10 percent monthly rate amounts to more than a 200 percent annualised cost.
For small business owners, traders and low-income borrowers, this gap matters. A trader taking a GH₵1,000 MoMo loan at 10 percent per month could pay GH₵100 in interest every month, more than GH₵1,200 over a year if rolled over, even as broader money market conditions push official rates downward. Meanwhile, bank loans priced off the Ghana Reference Rate, though not cheap, are comparatively lower and more transparent.
The persistence of high mobile loan rates, even amid falling formal interest benchmarks, underscores the urgent need for improved regulation, consumer education, and transparency in Ghana’s digital credit market. As mobile credit continues to expand, policymakers face mounting pressure to ensure that digital financial services deliver on the promise of greater access without imposing unsustainable costs on the country’s most vulnerable borrowers.
