Cooperative Loan Interest Rate Reduced to 13%
Summary
The government has lowered the maximum reference interest rate on cooperative loans from 16 percent to 13 percent, effective October 1, 2026. Cooperatives are also barred from charging extra fees or applying compound interest on these loans.
Key Points
- The government has capped the reference interest rate on loans issued by cooperative institutions to members at 13 percent, down from 16 percent.
- The new rate will take effect from October 1, 2026, under a directive issued by the Office of the Registrar of Cooperatives.
- Cooperatives are prohibited from charging extra administrative or service fees, and compound interest is banned.
- The directive also sets a maximum 6 percent spread between savings and loan interest rates and orders uniform rates for all members and staff.
