READ MORE
Couple Conspires To Defraud Company Of $650k
3 Student Dies In A Terrible Accident At Kwahu Akwaboa
Economic Crisis :Malawians Embrace Hard Times Ahead As Fuel Prices Go Up
Amid rising interest rates on the money market, Chief Executive Officer of Letshego Ghana, Arnold Parker, has revealed that interest rates on Qwikloans will increase in the coming weeks.
Qwikloan, an innovative financial solution by Letshego Ghana and MTN Mobile Money (MoMo), provides short-term, unsecured, quick and convenient loans to subscribers of MTN mobile money – which are currently at 42 million in total since inception.
Updating investors and other stakeholders during the Fact Behind the Figures held at the Ghana Stock Exchange (GSE), Mr. Parker said: “If not for some measures we have taken, what would have happened is that not only would margins have shrunk but our interest expense would have been more than interest income; because as we speak now, the Treasury bill rate is higher than our interest rate”.
Currently, the interest rate on a 30-day Qwik loan stands at 6.8 per cent. However, borrowers who default on the loans are penalised with a 12.5 per cent charge.
On the other hand, Treasury rates have increased from 12.52 per cent in early January 2022 to 24.68 per cent as of June 20, 2022.
“So unfortunately for our customers, we have had to revise our rates as soon as possible,” the CEO said.
Mr. Parker further revealed that the loan count is about 42 million. “In terms of disbursements, we do an average of GH¢10million in loans a day. So that’s roughly GH¢300million a month. That’s GH¢2.6billion a year, technically.
“So, it’s been a big learning experience to get out with our partners Jumo and MTN; it’s been a lot of learning, understanding customer behaviour, understanding repayment behaviour, being able to schedule loans and repayments in ways that ensure collections remain optimal.
“So, it’s a work in progress. There’s a lot more to be done in that space. And, hopefully, in the coming years, that’s what we’ll pay more attention to,” the CEO highlighted.
He mentioned that the E-levy and Ghana Card have slightly affected the loan intake.
Most users of mobile money services have reduced the number of funds held on their mobile wallets in order to avoid the E-levy charges. This has lowered the loan amounts customers qualify for.
However, he is certain that customers will come to realise the exemptions – which should get them back onto the platform.
“I’m sure; eventually, when they realise that there are a lot of exemptions, they may come back. And so, what we’ve seen is that because they don’t use their wallets often, they are now also qualifying for lower amounts. And so those are the learnings, and we need to immediately reprogramme our algorithms to take care of those,” he said.
-Ghanafeed
