When you open any loan on MYC4, on the first page, you will find
an item called total cost for business (APR). Ever wondered what
that means, is it the same as interest rate, why MYC4 prefers
using it, why it seems to differ across countries, its
limitations, and/ or any other question? This blog post seeks to
help on this, and highlight this measure of cost. APR in full
refers to Annual Percentage Rate. It is one among many measures
of the cost of a loan, which include interest rate, total cost
of capital etc. APR is quite often confused with interest rate,
or mistaken to be the same. The two are quite different. For
example on this loan for Grace Waruguru Mwangi, the APR is
54.23%, but the interest rate is 33.83%. APR as a measure of
cost ideally takes into account all costs of a loan including
interest, insurance fees, legal fees, processing/ closing fees,
forced savings, and any other fees paid upfront on a loan: It
then expresses all these costs as a single annual rate. The APR
computation assumes that a