Republic Bank has the lowest interest rate on household loans – BoG report

Republic Bank has the lowest interest rate on household loans – BoG report

Republic Bank Ghana Plc, according to a report by the Bank of Ghana (BoG), has the lowest Annualized Percentage Rates (APRs) on a 3-year and 5-year loan facility to households.

Republic Bank Ghana, the Central Bank notes in its report perused by norvanreports, has its loans taken by households for a 3-year or 5-year tenor to be the lowest.

The APR of 22.64 percent charged on 3-year and 5-year tenor loan facilities to households is some 9.5 and 10.36 percentage points lower than the APR of 32.14 percent and 33 percent charged on the same tenor of loan facilities by some banks which is the highest in the country.

According to the BoG, the APR reflects the true cost of a loan that economic agents are confronted with when they go through an approval process to secure a loan facility.

According to the BoG the publication is for the attention of the public and also promote transparency in the pricing of loans granted by the universal banks.

Lending rate or interest rate is the amount charged by lenders for a certain period as a percentage of the amount lent or deposited. The total interest on the amount or the principal sum is determined by the duration of time over which the amount is deposited or lent. Most loans use simple interest.

Interest rates apply to most lending or borrowing transactions. Individuals borrow money to purchase homes, fund projects, launch or fund businesses, or pay for their education.

Businesses take out loans to fund capital projects and expand their operations by purchasing fixed and long-term assets such as land, buildings, and machinery. Borrowed money is repaid either in a lump sum by a pre-determined date or in periodic installments.

Also an interest rate can also apply to the amount earned at a bank or credit union from a savings account.

The APR comprise the Ghana Reference Rate, bank-specific premia and other bank-specific charges.

Read details of BoG report below:

APR for September 2021 Date Published November 23 2021 by Fuaad Dodoo on Scribd