Dr. Baak Barnaba Chol, the new Minister of Finance and Planning speaks in Juba. (Photo: Obaj Okuj)

The Minister of Finance and Planning on Thursday warned money exchange offices, financial agencies and individuals against issuing illegal and excessive interest rates in the lending business.

Dr. Bak Barnaba Chol refers to the unregulated interest rates prevailing in the market, where difficult-to-repay loans are often granted, forcing beneficiaries to term them as “Cancer, Ebola and Corona”.

Dr. Bak urged lenders to adhere to the rules set by the Bank of South Sudan when providing loans to individuals.

While admitting the severity of the issue, Minister Bak said such loan practices are deemed illegal and must be discontinued immediately.

The minister’s warning aims to send a clear message to all lenders that profiting at the expense of vulnerable individuals through illegal interest rates will not be tolerated.

Speaking during the launching ceremony of Association of Microfinance in South Sudan in Juba, Dr. Bak said the Central Bank clearly indicates that interest rates must be between 12 and 15 percent of the amount borrowed.

“Now days there are illegal interest rate in the markets. There are Cancer, Ebola and Corona. These are illegal interest rate, and we are supposed to follow the Bank of South Sudan laws where the interest rate is clearly indicated as 12% or 15%,” he said.

He added: “Nobody is allowed to go beyond the pronounced interest by the Central Bank that’s the most important thing.”

Dr. Bak is calling on lenders to adhere to the regulations set by the Bank of South Sudan to eradicate exploitative lending practices and safeguard the interests of borrowers.

According to reports, illegal interest rates on loans have been a growing concern in South Sudan’s financial sector.

These rates, locally referred to as “Cancer, Ebola, and Corona” loans due to their detrimental impact on borrowers, are causing major financial burdens and hardships for individuals seeking financial assistance.