An Appraisal of Some Unfair Banking Practices In African Banks

in Project HOPElast month

On a cloudy afternoon some years ago, I walked into my bank, furious. I had only one mission in mind -- to close my bank account and go back home. Some days earlier, I had put a call through to my account officer to complain about the insane SMS charges that were being debited from my account. My account officer had calmed me down over the phone, assuring that he would do something about my plight. Unfortunately, he did nothing about it.

And there was I in the banking hall, ready to take the bull by the horn, ready to close my account having had $5 debited from it in the name of SMS charges. My reasoning was that the charges were unfair and could amount to millions of dollars in unjust revenue if my bank succeeded.

At any rate, the bank manager prevailed upon me and instead persuaded me into deactivating my SMS notifications, leaving only email notifications which comes with no extra charge. Well, I left the bank a happier man because I stopped being the cash cow of the bank.

Apart from charges on SMS, another unfair banking practice in some African banks is the practice of forced savings. Forced savings occur when a borrower is coerced into saving a certain percentage of a disbursed loan until the later part of the loan repayment, whereas interest is charged on the whole disturbed amount.

One must concede that while forced savings solve the liquidity issues of the bank or lending institution, the borrower is made to bear the burden of monies that were in the custody of the bank for most part of the loan maturity. This action is certainly an unfair banking practice that needs to be urgently stopped.

Furthermore, some African banks are guilty of deducting nameless, hidden charges from customer's account. Sometimes, the narration reads card maintenance while at other times the micro deductions are basically nameless and irritating. It is true that many bank customers find themselves unaware of what is taking place in their accounts, and do not even care about the deductions, but the bank gets rich in the process.

Lastly, some banks charge extra interests on loans that were restructured for reasons beyond the control of borrower, such as the outbreak of a pandemic or sharp changes in government policies. Once the borrower is unable to repay his loans for legitimate reasons, then it ought to be restructured without extra charges.

But we find that some banks only restructure loans if and when the borrower agrees to pay extra charges on the restructured loans. This practice is an unfair banking because the borrower is impoverished and exploited, only to the advantage of the bank.


Unfair banking practices are not peculiar to African banks, as it takes different shape and dimensions in different parts of the world. However, with stricter regulatory oversight of the Central Banks, millions of banked people can be protected from exploitation in the hands of the banks.

Images sourced from Pixabay


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I hate banks!

Lol hahaha banks suck

Hi @gandhibaba your post sure rings a bell banks around the world find a way to squeeze some extra money from their customers
Their is always a fine hidden line so one needs to be very careful when dealing with banks.

  • SMS charges
  • Deposit Charges
  • Cover charges for taking loan
  • Premature loan repayment changes and the list goes on and on

God save us from such banks and its charges

I say a big amen to your prayers. Thanks for stopping by.

I thought that most Afican people don't have banks and keep crypto in wallets, ofcourse I forget we all need fiat currency stored somewhere for spending and banks are therefore required.

I am so surprised they have SMS charges... I would be pained seriously if they do such things. Quite unfair!!

Thanks for sharing your thoughts on this article. The unbanked population in Africa is huge when compared to other parts of the world but that is not to say that corporate banking services aren't widely available and accessible.