Across Ghana, the demand for quick and accessible credit continues to grow. Small business owners, traders, and individuals struggling with daily financial pressures often look to digital platforms for relief.
Unfortunately, this need has become fertile ground for the proliferation of illegal loan applications, which operate without approval or oversight from the Bank of Ghana.
As of today, the only licensed and approved digital lending app in Ghana is Fido, according to the data from the Bank of Ghana website. Every other loan app you encounter is operating illegally. Yet, despite this clear regulatory position, unlicensed loan apps have mushroomed across the country, luring thousands of unsuspecting Ghanaians into debt traps.
Since I first wrote about this issue last year, more than 20 people have reached out to share their harrowing experiences with these platforms. Their stories expose the true cost of engaging with unregulated lenders and the urgent need for stronger enforcement.
Exploitation Through Data and Privacy Breaches
Because these apps are illegal, they do not fall under the protections of the Data Protection Act, 2012 (Act 843). Borrowers are often forced to surrender access to their personal information, including phone contacts, photos, and messages. This sensitive data is then misused for harassment, threats, and public shaming when borrowers miss payments. The psychological toll on victims and the reputational damage inflicted cannot be overstated.
Exorbitant and Hidden Charges
One of the most alarming practices is the way these apps impose interest rates. In direct violation of Section 55(2) of the Borrowers and Lenders Act, 2020 (Act 1052), which requires all banks and Specialised Deposit-taking Institutions (SDIs) to calculate interest rates on an annual basis only, these unlicensed lenders quote rates by the day, week, or month.
Some charge as much as 15% per month, without ever disclosing the annual equivalent. For market women and small traders, the deception is even worse. Many are told, “We give you GH¢10,000 and you pay GH¢200 each day for six months.” A simple calculation reveals that the borrower ends up paying GH¢36,000 for a GH¢10,000 loan — more than triple the original amount.
These predatory terms, coupled with hidden fees, trap borrowers in cycles of debt that are almost impossible to escape.
Harassment and Defamation
Beyond financial exploitation, victims face severe social consequences. Illegal lenders are notorious for sending defamatory messages to borrowers’ employers, colleagues, and family members. Even individuals who are up to date with their repayments have been harassed in this manner. The goal is simple: to shame borrowers into compliance, regardless of fairness or legality.
A Gateway for Money Laundering
Perhaps the most dangerous element is the risk of financial crime. Because these loan apps operate outside the regulatory environment, they are not bound by the Anti-Money Laundering Act, 2020 (Act 1044) or by Bank of Ghana and Financial Intelligence Centre (FIC) guidelines on Know Your Customer (KYC) procedures.
This makes them convenient channels for criminals to move illicit funds under the guise of legitimate lending and repayment. Fake borrowers, shell accounts, and rapid micro-transactions can easily be used to whitewash dirty money. Left unchecked, these activities threaten not only individual borrowers but also the integrity of Ghana’s financial system.
Risks to the Wider Economy of Ghana
First, these platforms distort the credit market. By offering loans outside the regulatory framework, they set their own exploitative terms, often with interest rates far beyond legal limits. This undermines fair competition and makes it difficult for responsible, licensed institutions to serve the same customers without appearing less attractive in the short term.
Second, they undermine licensed financial institutions. Banks and Specialised Deposit-taking Institutions (SDIs) are required to follow strict regulations under the Bank of Ghana, including transparent disclosure of interest rates, proper customer due diligence, and fair debt recovery processes. Illegal loan apps sidestep all of these rules, gaining an unfair advantage while weakening confidence in the institutions that play by the rules.
Another danger lies in tax evasion and capital flight. Many of these apps are backed by foreign operators who repatriate profits without paying local taxes. Funds that could have been reinvested into Ghana’s economy instead disappear across borders, reducing government revenue and undermining economic development.
Finally, illegal loan apps degrade the quality of financial data available to policymakers, credit bureaus, and regulators. Because these transactions are outside official reporting systems, they create gaps and distortions in the data used to measure borrowing patterns, assess creditworthiness, and design effective monetary policies. In the long run, this weakens the ability of regulators to make informed decisions that protect both consumers and the economy at large.
The Role of Key Institutions
Tackling the menace of illegal loan apps demands a coordinated response from key state institutions. The Bank of Ghana must not only license, monitor, and sanction lenders but also intensify public education on safe borrowing practices. The Financial Intelligence Centre (FIC) has a critical role in tracking suspicious transactions and enforcing compliance with anti-money laundering laws. At the same time, National Security must recognize these platforms as a genuine security threat, given their potential use in organized crime and illicit financial flows. Finally, the Cyber Security Authority must step up efforts to investigate and dismantle predatory digital platforms, working in partnership with app stores, telecommunication companies, and law enforcement agencies.
A Call for Vigilance
Small business owners, traders, and individuals must be especially cautious. The promise of “quick money” comes at too high a cost. Always verify lenders through the Bank of Ghana’s official list of approved institutions before borrowing. If you encounter a suspicious app, report it to the Bank of Ghana, FIC, Cyber Security Authority, or National Security.
About the Author:
Dickson Assan is a Chartered Accountant and SME Business Coach. He is the Lead Consultant at CareerCompass Gh Limited, where he works with entrepreneurs and small business owners to strengthen governance, improve financial management, and build sustainable enterprises. Mobile: +233242771314/Email: dicksonassan@gmail.com
