Interest Rate on MoMo Loans to go up

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Interest rates on MoMo Loans (Qwikloans) are expected to rise or go up in the coming weeks, according to the CEO of Letshego Ghana, Arnold Parker, due to growing interest rates on the money market.

More than 42 million MTN mobile money customers have used the Qwikloan financial solution service since its debut – making it one of the most popular mobile money services in Africa.

According to Mr. Parker, if they hadn’t taken appropriate actions, “not only would margins have shrunk, but our interest expense would have been more than interest income; since as we speak today, the Treasury bill rate is higher than our interest rate”.

He added that unfortunately, consumers should expect a rate increase as soon as possible.

Interest Rate on MoMo Loans (Qwikloan) to go up

He made these remarks when updating investors and other stakeholders during the Fact Behind the Figures held at the Ghana Stock Exchange (GSE).

A 30-day Qwik loan currently has a 6.8% interest rate. However, those who fail to pay back their loans face a 12.5 percent interest rate.

Contrary to this trend, Treasury rates jumped from 12.52 percent in early January 2022 to 24.68 percent as of Friday, June 20, 2022.

Parker further indicated that the total loan count is somewhere around 42 million. An average of GH¢10 million in loans are disbursed every single day. So, a month’s worth of GH¢300 million. Technically, that’s about GH¢2.6 billion a year.

He said that the E-levy and the Ghana Card have had a small impact on the number of loans being taken out.

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Due to E-levy fees, many mobile money users have restricted the amount of money they keep in their accounts. As a result, less money is available to customers that need loans.

Customers will eventually realize the exceptions, he believes, and then they will return to using the platform.

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Interest Rate on MoMo Loans to go up

 

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