The research was carried out to study the effect of interest rates charge on loan repayment in community banks with specific regard to Yoni Community Bank, and the following objectives was derived to arrive at the main aim of the study and these objectives are follows, to look at the effect of interest rate ceiling on loan repayment in Yoni Community Bank, to evaluate the impact of interest rates fluctuation (rising and falling interest rates) on loan repayment in Yoni Community Bank and to analyzing the effects of interest rate on the supply of loans. The study established that most Yoni Community Bank customers were aware of the influence interest rates have on loans in regard to business performance. It was established that the provision of loans to customers has a great impact on their businesses performance. This partly explains unenthusiastic regard of the management of Yoni Community Bank to their improvements, in the credit terms to their client’s entrepreneurs. The study also established the most important cause of poor business performance and collapse as being amongst others the high interest rates, limited amount lent, lack of entrepreneurship skills and high taxes. The researcher recommends that management of Yoni Community Bank should endeavour to conduct some entrepreneurship skills and loan servicing short training workshops if it’s to meet its objectives. It should also revise its terms of lending and reduce on the interest rates to enable entrepreneurs make profits and be able to service their loans as this will lead to the growth and continuity of their businesses.