Borrowing to Survive: Inside the World of Mobile Loans
By Adoma
Accra, Ghana — When the notice for her rent renewal arrived, 27-year-old Sandra Nyarko did what she always does in emergencies — she opened her mobile loan app. With three taps and an automated selfie, ₵600 landed in her mobile wallet. She exhaled in relief.
“I told myself I’ll repay in two weeks,” she says. “But it’s been three months now, and I owe twice that amount.”
Sandra is part of a growing wave of Ghanaians turning to mobile loan platforms to cover daily expenses — not business investments, not luxury items — but rent, food, medicine, and school fees. While fintech innovations promise inclusion, critics argue that predatory rates, weak regulation, and debt cycles are turning lifelines into traps.
The Rise of Mobile Lending
Over the past five years, mobile loans have exploded in popularity across Ghana. Apps like Fido, FairMoney, Carbon, and MTN Qwikloan promise instant, collateral-free cash to anyone with a mobile phone and basic ID.
Ghana’s tech-savvy population, high mobile penetration rate, and limited access to traditional banking services created the perfect storm for this digital lending boom.
“Mobile lending filled a gap,” says Selorm Nartey, a fintech analyst. “People needed fast, easy cash — and the banks weren’t offering it.”
The Numbers: A Snapshot
According to the Bank of Ghana, the total value of mobile loans issued in 2023 exceeded ₵3.5 billion — a 22% increase from the previous year.
But behind the numbers are millions of people like Sandra who are stuck in debt spirals.
“I now have loans from three apps,” she confesses. “I borrow from one to pay another.”
Small Loans, Big Problems
While initial amounts are often modest — ₵100 to ₵1000 — interest rates can range from 15% to over 30% per month.
Take Kofi Owusu, a 34-year-old taxi driver in Kumasi. After borrowing ₵400 to fix his engine, he ended up paying ₵560 within 30 days.
“That’s more than a 40% interest rate when you count the late fee,” he says. “If I had that money upfront, I wouldn’t have borrowed at all.”
Who Uses Mobile Loans?
Mobile lending appeals to:
- Informal workers with unstable incomes
- Low-wage earners who can’t qualify for bank loans
- Small business owners needing short-term cash flow
- Urban youth facing unpredictable expenses
But the majority of users are not building wealth — they’re plugging holes.
“I used to think of loans as investments,” says Sandra. “Now they’re survival.”
The Emotional Toll
Beyond the financial burden, mobile loans come with emotional stress. Many platforms use aggressive debt collection tactics: repeated phone calls, SMS reminders, and, in some reported cases, public shaming.
“I got a call at work,” said Ama Danso, a 23-year-old waitress. “They told my manager I owed them ₵270. I was so embarrassed.”
Some apps access users’ contact lists and send mass messages to family members when repayments are late — a practice condemned by data privacy experts but still prevalent.
The Regulator Steps In
In response to growing complaints, the Bank of Ghana has issued guidelines for digital lenders, including:
- Disclosure of true interest rates
- Prohibition of abusive recovery practices
- Mandatory registration and licensing
But enforcement remains inconsistent.
“There are too many rogue apps operating outside the system,” says Nana Afriyie, a digital finance advocate. “Some are based overseas, and users don’t even know who owns them.”
Stories of Relief — and Regret
Not all stories end in hardship. For 30-year-old Kwabena Mensah, a mobile loan helped him purchase inventory for his mini-mart. “I paid back early and qualified for a bigger loan next time,” he says.
But even he admits it’s a risky game. “You must be disciplined, or you’ll drown.”
A Generation in Debt?
Some experts worry that mobile lending is normalizing debt among young people.
“When debt becomes the default response to hardship, it erodes financial resilience,” warns Professor Afua Dwamena of the Ghana Institute of Management and Public Administration (GIMPA). “We need to teach budgeting, not just offer credit.”
Seeking Solutions
Stakeholders are calling for:
- Better financial literacy education
- Capped interest rates on short-term loans
- Transparent data practices
- A national credit scoring system to prevent overborrowing
The Ghana Fintech and Payments Association has proposed partnerships with mobile networks to offer more ethical, affordable credit.
Alternatives and Hope
Some NGOs now offer interest-free community loans. Others are piloting cooperative savings models via mobile apps. For those like Sandra, such alternatives can’t come fast enough.
“I’m tired of borrowing,” she says quietly. “But life in Ghana today — it forces you.”
Until wages rise and safety nets grow, mobile lending may remain the fallback for many. And while it offers convenience, it’s clear: when borrowing becomes surviving, the line between help and harm gets blurry.