The true cost of borrowing: Analysing APR Data from leading banks



When considering taking a loan from a bank, it is crucial to understand the Annual Percentage Rate (APR) associated with the loan. The APR gives a clear picture of the cost of borrowing, including the interest rate and any additional fees or charges. A recent report published by the Bank of Ghana, compiled based on information provided by the banks themselves, provides detailed insights into the APRs for various banks in Ghana, specifically for household loans with a tenor of 1 year. This article will help you make informed decisions by breaking down the APR data from this report.

Key Elements of APR

  1. Interest Rate: This is the base rate charged on the loan. It includes the Ghana Reference Rate (GRR) and the spread. The GRR is common for all banks, but the spread can vary, affecting the overall interest rate.
  2. Fees and Charges: These can include commitment fees, processing fees, arrangement fees, insurance fees, and facility fees. Understanding these fees is essential as they contribute to the overall cost of the loan.

APR Analysis of Banks in Ghana

The table below shows the APR details for various banks, including their interest rates and indicative fees:

Bank Name Avg. Lending Rate Processing Fee Insurance Fee Facility Fee Avg. APR
GCB Bank Limited 26.71% 1.80% 1.00% 1.00% 27.71%
Standard Chartered Bank (Ghana) Limited 26.67% 2.50% N/A N/A 29.17%
Republic Bank (Ghana) PLC 27.67% 1.00% 1.00% 1.00% 32.75%
Societe General Ghana PLC 28.38% 2.25% 1.24% 2.25% 32.78%
OmniBSIC Bank Ghana Limited 28.97% 1.50% N/A 1.50% 33.68%
Access Bank Ghana Plc 29.50% 1.00% 1.00% 1.00% 34.80%
Ecobank Ghana Limited 34.15% 1.00% 1.25% 1.00% 34.88%
Consolidated Bank Ghana Limited 28.94% N/A N/A 2.00% 35.34%
Zenith Bank (Ghana) Limited 31.83% 1.00% 0.30% 1.00% 35.61%
Absa Bank Ghana Limited 30.85% 1.81% 1.35% 1.81% 35.64%
Guaranty Trust Bank (Ghana) Limited 32.72% 1.00% 1.00% 1.00% 37.92%
CalBank PLC 35.67% 1.00% 1.40% 1.00% 38.04%
Fidelity Bank Ghana Limited 29.24% 2.00% 1.68% 2.00% 39.85%
FBNBank (Ghana) Limited 34.31% 1.50% 1.00% 1.50% 40.13%
Agricultural Development Bank Limited 38.90% 1.00% 1.00% 2.00% 41.30%
Prudential Bank Limited 32.43% 2.00% 2.00% 2.00% 41.31%
National Investment Bank Limited 41.74% 1.50% 0.75% 1.50% 42.79%
First National Bank (Ghana) Limited 36.49% 1.50% 2.40% 2.50% 43.63%
First Atlantic Bank Limited 36.53% 1.00% 2.50% 1.00% 43.64%
Universal Merchant Bank Limited 37.13% 1.50% 1.00% 1.50% 45.62%
United Bank for Africa (Ghana) Limited 39.31% 2.00% 2.00% 2.00% 45.87%
Stanbic Bank Ghana Limited 36.08% 1.60% 2.00% 2.00% 50.92%
Bank of Africa Ghana Limited N/A N/A N/A N/A N/A


What to Consider When Choosing a Bank for Loans

  1. Average Lending Rate: Lower lending rates mean cheaper borrowing costs. For instance, GCB Bank Limited offers one of the lowest average lending rates at 26.71%, making it a cost-effective option.
  2. Fees and Charges: Additional fees can significantly increase the overall cost of the loan. It’s important to compare not only interest rates but also the various fees charged by the banks. For example, Fidelity Bank Ghana Limited has relatively higher fees which could affect the total cost of the loan.
  3. Total APR: The APR gives a comprehensive view of the loan cost. Banks like GCB Bank Limited and Republic Bank (Ghana) PLC have lower APRs, making them more attractive options for borrowers.
  4. Hidden Costs: Be aware of any potential hidden costs or conditions that might apply to the loan. Ensure that all fees are disclosed upfront.

High Interest Rate

Banks charging high interest rates often reflect underlying financial challenges or strategic considerations. For instance, banks in Ghana, such as United Bank for Africa (Ghana) Limited and Stanbic Bank Ghana Limited, have high interest rates, with average APRs of 45.87% and 50.92%, respectively. These elevated rates can indicate that these banks are facing heightened risks in their lending environment, possibly due to economic instability, high default rates, or currency fluctuations. Such conditions necessitate higher returns to compensate for potential losses. Additionally, banks might have significant operational costs, including the cost of capital, regulatory compliance expenses, and maintaining liquidity buffers, which are passed on to borrowers through increased rates. Furthermore, in competitive markets with limited loan demand, banks might raise interest rates to maintain profitability margins. These factors collectively contribute to the higher costs of borrowing for consumers, as banks navigate complex financial landscapes to ensure their stability and sustainability.


Understanding the different components that contribute to the APR will help you make a more informed decision when choosing a bank for your loan needs. Always compare both the interest rates and the additional fees to determine the total cost of borrowing. This way, you can choose the best financial product that suits your needs and avoid any unpleasant surprises down the road.

By staying informed and doing your due diligence, you can effectively manage your finances and secure the best possible terms for your loans.

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