Govt caps cooperatives’ lending interest rate at 13 pc, down from 16 pc
Summary
The government has capped cooperative lending interest rates at 13 percent, down from 16 percent, and barred extra fees such as administrative and service charges. Cooperatives must also disclose rates publicly and avoid discriminatory lending terms among members and staff.
Key Points
- The Office of the Cooperatives Registrar has fixed the reference lending interest rate for cooperatives at a maximum of 13 percent effective Thursday.
- Cooperatives can set lower rates, but the spread between savings and lending rates cannot exceed six percentage points.
- The directive bans capitalization of accrued interest for compound interest and limits penalty charges to 5 percent of outstanding interest.
- Cooperatives must publicly disclose interest rates and cannot impose extra fees or discriminatory lending terms among members and staff.
