Increasing consumer loan transparency: The role of the annual percentage rate of charge

Transparency in advertising of consumer loans is not only important for consumer protection reasons, but also for the stability of the financial sector. The average percentage rate of charge (APR) is, in this regard, a highly useful tool as it includes all the costs of a credit and expresses them in a single number, thus makes different loan offers easily comparable for borrowers. In this policy paper we analyse the transparency situation in the Moldovan consumer credit market with a focus on appropriate use of the APR in advertising.