A survey conducted by the Bank of Ghana (BoG) shows that retail loans attract about 7.75% in charges in addition to the interest rate to be paid as of the last quarter of 2019.
The study indicates that commercial banks in Ghana charge five different fees on loans given to their retail clients.
The survey looked at all charges imposed by banks on their
various products and services and it covered all 23 banks operating in the
Banks with highest fees
Ecobank charged the highest fee of 7.75% and it is closely
followed by First National Bank-GHL Bank which charges a lending fee of 5.25%
on retail loans and Stanbic bank which charged 5.1% in lending fees on retail
loans as of the end of December 2019.
Meanwhile, Cal Bank, Republic Bank and Bank of Africa each charge
a 3% lending fee on retail loans while Access bank, Fidelity Bank and Barclays
bank had fees ranging between 1.5 to 6.75%, 3.75 to 5.86% and 3.65 to 4.35%
On the other hand, United Bank for Africa charges as low as
no fee to 2% on retail loans with Zenith Bank and Standard Chartered bank
charging 2% – 3.5% and 2% – 2.5% respectively.
However, Consolidated Bank Ghana failed to provide any
information on its lending fee charges for its loans as the survey showed the
non-availability of data.
A retail loan is a facility offered to an individual by a
commercial bank, a credit union, or a financial institution to purchase assets
like property, vehicles, consumer electronics, etc.
The survey mentioned that between October and December 2019,
commercial banks charged five different fees including.
These fees includes the arrangement fee, which is an
administration charge made by lenders for arranging credit, processing fee,
which is charged to cover the costs incurred by the lender on the loan process,
as well as insurance fee which is applied, and the insurance premium added to
the loan amount and paid back over the life of the loan.
The survey further showed that a bank may charge all of the five or at least one of the fees.
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