By Kofi Ahovi and Elorm Desewu
The credit reference Bureau, the first online credit bureau in the country is currently facing major setbacks hindering its smooth take off.
Banks chieftains that BusinessWeek spoke to were of the view that, although the credit reference bureau would check the credit worthiness of customers of banks and non-Bank Financial Institutions (NBFI), the problem now is how customers would be tracked since the house and street naming in the country is poor.
This means that banks and NBFIs will find it very difficult to trace their customers who may default on loans, resulting in the rise of bad and doubtful debts.
Information gathered by BusinessWeek indicates that all the 26 universal banks and a total of 36 NBFIs have registered with the bureau. One communication operator has also registered with the bureau under the post paid service category.
However, out of the 26 banks, only 21have undergone training on how to use the bureau’s data while only 12 NBFIs have also undergone the training.
XDSDATA Ghana Limited, the first credit reference bureau in Ghana, introduced the online data system for banks and NBFI in April this year.
Credit reference is the collection, maintaining and sharing of both demographic and credit information on individuals and small businesses with lenders, on request, to enable them to make informed decisions when granting credit.
This means that lenders that have registered with the bureau and supply data to it can make credit checks on loan applicants, as well as trace defaulters in the bureau’s data from the comfort of their offices.
The introduction of credit bureau operation is poised to change the situation where lenders find it difficult to gather demographic and credit information about loan applications. It would also enable banks, NBFI and other grantors to establish the creditworthiness of borrowers. This would lead to rewarding good borrowers with more favorable terms, while exposing bad borrowers.
The bureau will help lenders and merchants have access to more information on potential clients in order for them to make faster and more informed credit decisions. Borrowers on the other hand will also have the opportunity to develop good credit history that will enable them receive faster credit approvals without having to rely on collaterals and guarantees to access credit. Borrowers with good history can even negotiate better terms of lending.
Under section 1 of the Credit Reporting Act, 2007, Act 726, a credit reference bureau company is required to have a minimum paid-up capital of GH¢500,000.00.
The credit reference Bureau, the first online credit bureau in the country is currently facing major setbacks hindering its smooth take off.
Banks chieftains that BusinessWeek spoke to were of the view that, although the credit reference bureau would check the credit worthiness of customers of banks and non-Bank Financial Institutions (NBFI), the problem now is how customers would be tracked since the house and street naming in the country is poor.
This means that banks and NBFIs will find it very difficult to trace their customers who may default on loans, resulting in the rise of bad and doubtful debts.
Information gathered by BusinessWeek indicates that all the 26 universal banks and a total of 36 NBFIs have registered with the bureau. One communication operator has also registered with the bureau under the post paid service category.
However, out of the 26 banks, only 21have undergone training on how to use the bureau’s data while only 12 NBFIs have also undergone the training.
XDSDATA Ghana Limited, the first credit reference bureau in Ghana, introduced the online data system for banks and NBFI in April this year.
Credit reference is the collection, maintaining and sharing of both demographic and credit information on individuals and small businesses with lenders, on request, to enable them to make informed decisions when granting credit.
This means that lenders that have registered with the bureau and supply data to it can make credit checks on loan applicants, as well as trace defaulters in the bureau’s data from the comfort of their offices.
The introduction of credit bureau operation is poised to change the situation where lenders find it difficult to gather demographic and credit information about loan applications. It would also enable banks, NBFI and other grantors to establish the creditworthiness of borrowers. This would lead to rewarding good borrowers with more favorable terms, while exposing bad borrowers.
The bureau will help lenders and merchants have access to more information on potential clients in order for them to make faster and more informed credit decisions. Borrowers on the other hand will also have the opportunity to develop good credit history that will enable them receive faster credit approvals without having to rely on collaterals and guarantees to access credit. Borrowers with good history can even negotiate better terms of lending.
Under section 1 of the Credit Reporting Act, 2007, Act 726, a credit reference bureau company is required to have a minimum paid-up capital of GH¢500,000.00.
Comments