4 Best Loan Institutions In Ghana

4 Best Loan Institutions In Ghana

Hardly anyone would access a loan for the sake of it. Even if it is for social programs like weddings or parties, that is an important decision for them. No matter the loan amount needed or disbursement period, one question anyone would want answered before taking the loan is the interest to be paid. Based on the disbursement period and interest to pay, these are the best four (4) best loan institutions in Ghana to access your loans from or otherwise, access your situation ‘thrice’.

1. Family and Friends: The best option to access interest-free loans is your family and friends. Words like ‘I/we need it now’ are synonymous with loans from family and friends. There is no paper work. No or little interest. For the borrower, there is virtually no risk involved. However, the lender has all the risks to bear losing all the amount given out or losing your friend to asking for repayments.

Permanent default or delayed repayment are usually what makes an individual not credit worthy for future requests. A circle of family and friends who do not default or delay repayments usually appear well to do to outsiders because they can borrow to meet critical situations without many complaints.

2. Susu: Susu is a practice where a group of people contribute to one person in a rotational basis on a regular interval like daily or weekly or monthly intervals, etc. There is no interest charged by anyone. Positions are normally interchanged regularly after every cycle and/or on a needs basis.

This system, apart from monetary objectives, also enhanced communal spirit. Documents are mostly absent. The main problem with this source of funding is complex risk sharing among members where the health status of any member or dependant could prevent a member from honouring his/her obligation after such person has already accessed his Susu.

3. Workplace mutual funds or welfare funds: As the name implies, workplace welfare/mutual funds are meant to provide opportunities for members to solve pertinent financial issues.

Mostly because not every member would access the welfare funds as loans and also with a formula that limits members’ borrowing limit, so as to have reserves that build the fund also protect members from over borrowing, every member of the fund could access loans from the mutual/welfare funds.

Documents required and forms to fill in are very minimal. The main challenge with welfare loans is that it could take a relatively longer period for the loan to be disbursed.

The main benefit of taking loans from workplace mutual/welfare is that members of the fund enjoy part of the interest on the loans.

It is the reason the interest charged or deductions made on mutual fund loans are less than those obtained from traditional banks.

However, if you factor in the part of the loan which could be considered as your own contributed money, the comparative interest between mutual/welfare funds and that of traditional banks is almost the same.

Forced savings is also one benefit for belonging and taking loans from workplace mutual funds.

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4. Traditional banks: At the top of the financial sector, traditional banks are able to give out loans at relatively low interest compared with other categories of banks.

Many factors account for why traditional banks are able to give loans at lower interest, including lots of deposits, due diligence and lower non-performing loans, less overhead cost etc.

In Ghana, deposit-taking institutions are classified into banks, savings and loans, rural banks, savings and loans, finance houses, Micro-Finance Companies etc. Out of these categories, the traditional banks are the best loan institutions in Ghana. Any other category is a slaughterhouse for borrowers.

Reference: www.bog.gov.gh

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