The government is working on developing a credit system in Ghana with Credit Scoring by the Credit Reference Agencies, Vice President Mahamudu Bawumia has said.
He said key anchors such as the Ghana-Card would provide a unique identity and essential information about the bearer including bank accounts, sim card, SSNIT, NHIS and many more.
He stated that the National Digital Property Address System would also provide a definite location for the borrower, adding that the necessary measures had already been put in place to enable credit scoring.
A credit reference agency is an independent organisation that securely holds data including one’s credit applications, accounts, and financial behaviour.
The data is then used to generate a credit score, stating one’s credit worthiness, and helping to determine how much, if any premium should be put on any application for a loan or hire-purchase.
Vice President Bawumia announced this at the opening ceremony of the 18th Biennial Connexional Youth and Students Assembly (YASA) of the Methodist Church of Ghana at Nyanyano in the Central Region on Friday.
The Vice President said what made some countries appeared more developed was the systems they had put in place to ensure life became easier and simpler, noting that, the Akufo-Addo’s administration since it assumed office had been working hard to leverage technology, to infuse digitization into everyday life for an accelerated development.
“We are changing the economy; we are changing the system.
“The reason things seem to work in the developed countries is because they have systems and institutions that work. We are the same human beings across all the continents, but they have systems that are working, and it is those systems that we are putting in place in Ghana,” he stated.
“Those systems that will make sure that you cannot hide, and you go and commit a crime, or not pay a loan, and nobody will find you.
“The system we are putting together in Ghana is very transparent, open, it will reduce corruption, enhance the efficiency of the delivery of public services, it will reduce the cost of doing business, and reduce bureaucracy,” he added.
He said Ghana would have a credit system by the end of this year because it had linked all the bank accounts to the Ghana-Card, therefore the Credit Reference Agencies would be able to undertake credit scoring in the country.
“Credit scoring would allow every individual to have a unique credit score. You will be able to check your own credit score with your national ID. If you are someone who does not pay back loans you will have a very low credit score and the banks will not lend you money.
“If you are someone who pays you will have a high credit score, you will have a lower interest rate, and the banks will lend you money,” Dr Bawumia explained.
“We are building this economy, this new system which will help everybody, because the old system is one where you did not have transparency, but the whole society was paying for this lack of transparency. We have high interest rates, for instance.
“But through digitisation, we have put in place the necessary systems, so that now tertiary students can get loans without guarantors. In the future, depending on your credit score, you can get a cheap loan, get essential items like fridges, cars and other household accessories on credit, and even secure mortgages,” Dr Bawumia told the gathering.