When easy credit becomes expensive: understanding the true cost of retail financing in Guyana

Dear Editor,
Access to credit has become an important lifeline for many families and small business owners across Guyana. Retail financing plans, hire-purchase agreements, and store-based credit facilities can make it possible to obtain appliances, electronics, furniture, or even cash loans without going through traditional banks.
However, consumer advocates are urging borrowers to look more closely at the true cost of some of these financing arrangements. While monthly payments may appear manageable, the total repayment amount over time can sometimes be far higher than expected.
In several cases examined, especially with a popular main street credit provider, credit agreements clearly state monthly instalment amounts and the total sum repayable over time but do not expressly state the annual interest rate or annual percentage rate (APR). While the total repayment figure may technically include interest, the absence of a clearly stated rate makes it difficult for an average consumer to assess how expensive the credit truly is.
These organisations promise a buy now pay later and a popular “ready finance” option and prey on consumers who are desperate for a solution to their short-term problem. When interest is not disclosed in plain terms, borrowers may unknowingly commit to agreements where the total repayment significantly exceeds the value of the goods or funds originally received. Over multi-year repayment periods, this can result in consumers paying far more than anticipated.

The Role of Consumer Protection
Guyana’s consumer protection framework is intended to promote fairness and transparency in commercial practices. Ensuring that credit agreements are clearly explained and properly disclosed benefits both lenders and borrowers and helps build trust in the financial system.
Greater public awareness, improved financial literacy, and continued regulatory attention to disclosure standards can help ensure that access to credit remains a tool for opportunity rather than a source of unexpected hardship.
This issue is not about denying access to credit, as credit plays a vital role in economic participation. Rather, it is about ensuring that lending practices are fair, transparent, and clearly understood by the people who rely on them.

Yours sincerely,
Concerned Citizens against Predatory Lending