1% Processing fee (deductions) slapped on all Quickloans
Information reaching Ghana Education News’ business desk is that the government of Ghana has introduced a 1% proceesing fee on Quickloans accessed.
What this means is that anyone who applies for a Quickloan will be charged a 10% processing fee, which will be deducted instantly from the load approved for the client.
For instance, if you apply for a loan of GHS1000.00, and it is approved, you will receive GHS990.00 instead of the full amount.
Below is the proof: 1% tax (deductions) slapped on all Quickloans
It is not clear if the 1% deduction, which has been named a processing fee, has been approved by Parliament.
The effect of a 1% tax on all Quickloans on Ghanaians, who are already overburdened with taxes on their Momo and all transactions done with Momo, is likely to be negative.
- Increased cost of borrowing: The tax would increase the cost of borrowing for Quickloan users, as the lenders would pass on the cost of the tax to borrowers in the form of higher interest rates. This would make Quickloans less affordable for borrowers and could discourage some people from using them.
- Reduced demand for Quickloans: The higher cost of borrowing could lead to a reduction in demand for Quickloans. This would have a negative impact on Quickloan lenders, who would see their profits decline.
- Increased use of informal lending: If Quickloans become more expensive, some borrowers may turn to informal lenders, such as loan sharks. Informal lenders typically charge higher interest rates than Quickloan lenders, and they are less likely to be regulated. This could lead to borrowers being trapped in a cycle of debt.
- Negative impact on the economy: A reduction in demand for Quickloans could have a negative impact on the economy. Quickloans are often used by small businesses to finance their operations. If demand for Quickloans declines, this could lead to a reduction in investment and economic growth.
Overall, the effect of a 1% tax on all Quickloans by the government on Ghanaians, who are already overburdened with taxes on their Momo and all transactions done with Momo is likely to be negative. The tax would increase the cost of borrowing, reduce demand for Quickloans, and encourage the use of informal lending. This could have a negative impact on borrowers, lenders, and the economy as a whole.
READ: Bank of Ghana warns the public of 96 online loan apps and businesses
In addition to the above, the tax could also have a negative impact on financial inclusion. Quickloans are a popular way for people who do not have access to traditional banking services to obtain credit. If Quickloans become more expensive, this could make it more difficult for people to access credit, which could have a negative impact on their livelihoods.