Ghana is rapidly expanding digital lending market. The country handles billions of cedis in mobile-based loans every month. This could face instability if the Bank of Ghana (BoG) does not introduce standardized rules for setting interest rates on fintech platforms.
To address this, Professor Peter Quartey, former Director of the Institute of Statistical, Social and Economic Research (ISSER), has called on BoG to establish a clear benchmark for determining interest rates in digital finance. He noted that the current lack of a standard framework has caused inconsistent pricing, unfair practices, and rising defaults, which could eventually erode public trust in fintech credit.
Speaking at the 2025 Fintech Stakeholder Forum in Accra, Prof. Quartey proposed a framework modeled on the Ghana Reference Rate (GRR) system used by banks.
“We need a clear benchmark for determining interest rates,” he said. “Just as banks use the Ghana Reference Rate plus a margin, digital lenders should operate within a similar guideline. I didn’t find any structured framework for interest rate determination in the fintech space, and we need to look at this carefully. When rates are too high, default increases; when they are too low, lenders lose profitability. A regulator-backed formula ensures balance and protects both sides.”
The forum, organized by MobileMoney LTD under the theme “Harnessing Ghana’s Fintech Potential: Regulatory Frameworks for Digital Credit and Digital Assets,” brought together regulators, fintech firms, banks, policy experts, and academics to discuss ways to strengthen digital payments and responsible innovation in the sector.
Prof. Quartey explained that a formula could link digital loans to the GRR, adding a small margin of one to two percent based on borrowers’ risk profiles. He argued this would bring fairness and predictability to a market where interest rates currently vary widely.
The professor’s comments were backed by research on digital credit behavior in Ghana. The study revealed significant differences in loan rates, repayment habits, and risk management across providers. Accra and Kumasi recorded the highest loan volumes, reflecting population density and digital access. Younger borrowers, particularly in their 20s and 30s, were more likely to default, while men tended to borrow higher amounts.
“We observed that as borrowers age, their repayment discipline improves,” Prof. Quartey noted. “The younger generation is more likely to default, possibly because of impulsive borrowing behavior or unstable incomes. This behavioral pattern points to the need for better credit scoring systems and stronger financial education.”
The research also found that while national network coverage and agent density were very strong. The credit scoring systems were rated low to medium. This indicates weaknesses in assessing borrower risk. Due to a lack of standardized datasets AI and machine learning tools used by fintechs are prone to errors .
Prof. Quartey warned that without intervention, defaults could rise, shaking confidence and creating systemic risk. He urged BoG to implement not only interest rate benchmarks but also a national digital credit policy.
He also highlighted the need to safeguard lenders. “A formula-based benchmark ensures balance, fairness, and sustainability,” he stressed. “It is the foundation for a transparent and inclusive digital finance ecosystem.”
