To address the phenomenon, Professor Peter Quartey, former Director of the Institute of Statistical, Social and Economic Research (ISSER), has called on BoG to introduce a clear benchmark for determining interest rates across digital finance platforms.

According to him, the current absence of a standardized formula for setting digital loan rates has led to inconsistency, unfair pricing, and rising borrower defaults—trends that could eventually erode public trust in fintech credit.

Speaking at the 2025 Fintech Stakeholder Forum in Accra, Prof. Quartey proposed that the central bank develop a digital lending framework modeled on the Ghana Reference Rate (GRR) system used by traditional banks.

Held under the theme “Harnessing Ghana’s Fintech Potential: Regulatory Frameworks for Digital Credit and Digital Assets,” the forum brought together regulators, fintech firms, banks, policy experts, and academia to deliberate on how Ghana can strengthen digital payments and ensure responsible innovation in the growing fintech space.

The forum was organised by MobileMoney LTD.

Prof. Quartey explained that such a formula could link digital loan rates to the GRR, adding a small margin—perhaps one or two percent—based on borrowers’ risk profiles.

This, he argued, would help bring fairness and predictability to an increasingly chaotic digital lending environment where rates can vary dramatically across platforms.

“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.”

Prof. Quartey’s remarks were grounded in fresh research on market readiness and digital credit behavior in Ghana’s fintech sector.

The study revealed sharp disparities in loan rates, repayment behavior, and credit risk management across providers.

Accra and Kumasi topped loan volumes, reflecting their population and digital penetration levels, but the data also exposed significant gender and age differences in borrowing and repayment.
Men took higher loan amounts on average, while younger users, especially those in their twenties and thirties, showed higher tendencies to default.

According to the research, about 40.2% of borrowers repaid their MTN loans in full, over 50% partially defaulted but paid in full, while just about 5% failed to pay back entirely.

According to Prof Quartey, the reasons for default ranged from unrealistic interest rates and poor borrower assessment to economic hardship and lack of financial literacy.

“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 findings also highlight the uneven readiness of Ghana’s digital finance infrastructure.
The report rated national network coverage and agent network density as “very high,” but found that network reliability and the cost of data remain moderate challenges.

The country’s credit-scoring systems, however, received one of the lowest ratings—“low to medium”—suggesting that the current tools for assessing borrower risk are not robust enough. While fintech companies increasingly rely on artificial intelligence (AI) and machine learning to evaluate creditworthiness, the absence of standardized datasets and regulatory oversight makes these systems vulnerable to errors and bias.

The report’s data also suggest that Ghana’s digital finance ecosystem remains unevenly prepared for large-scale credit expansion.

While the technological infrastructure is generally sound—with high agent network density and decent coverage—credit scoring remains inadequate.

Prof Quartey warned that if regulators fail to intervene, default rates could rise, leading to a loss of confidence and potential systemic risk.

He urged BoG to establish not just interest rate benchmarks but a broader national digital credit policy that includes transparent risk pricing, data-sharing standards, and stronger consumer protection.

He argued that such a policy would deepen financial inclusion by making digital credit fairer and safer for both lenders and borrowers.

Prof. Quartey also called attention to an overlooked aspect of the policy debate—protecting lenders.
While consumer protection laws and data privacy rules are vital, he argued, policymakers must also consider how fintech lenders can be safeguarded against default and fraud.

According to him, a properly designed formula for setting digital lending rates would address both sides of the equation.

By establishing clear benchmarks—similar to the Ghana Reference Rate used by banks—the system would reduce exploitative pricing while giving fintechs a predictable structure for managing risk.
This approach would align digital lending with Ghana’s overall monetary policy, help reduce default rates, and promote responsible innovation.

“A formula-based benchmark ensures balance, fairness, and sustainability,” he stressed.
“It is the foundation for a transparent and inclusive digital finance ecosystem.”