It’s true that Ghana lacks effective credit scoring systems, dissenting views are surprising – Bawumia

The Vice President has said it was surprising that some persons disagreed with his comment that Ghana does not have an individualized credit scoring system because the Bank of Ghana (BoG) had even stated that.

Dr Bawumia said it was true that Ghana lacked an individualized credit scoring system.

Speaking at the 20th edition of the Ghana Club 100 Awards on Saturday, December 9 while highlighting the benefits of the digitization economy, he said “Digitisation of the economy is going to continue  The other day I was talking about one of the problems that we have in Ghana being the lack of an effective credit system as compared to what we see in most of the advanced countries.

“In Ghana when you receive pay cheque that is really what you try to rely on for the rest of the month but in many other jurisdictions the credit systems work effectively to increase your consumption possibilities. So I was making the statement that one of the things that we don’t have currently in Ghana is a credit scoring system that the credit reference agencies will normally do.

“That statement that I made was, of course, a truism, surprisingly some wanted to disagree with that statement and even disagreed with the regulator, the central bank which was saying we don’t have that system again, the Individlaised Credit scoring system.

“Now with the cooperation of the central bank, we are very close next year to introducing an individualized credit scoring system in Ghan which will allow us to differentiate between risks between different individualized .that was in the sense that is aid that individualized credit scoring system will have Ghana Card as an anchors because it is the unique identifier for everybody, which will then allow credit to be more  accessible.”

Dr. Bawumia earlier announced at the 57th congregation of the Kwame Nkrumah University of Science and Technology that Ghana would introduce a credit scoring system next year to allow Ghanaians access to personal loans and also help financial institutions control the allocation of risks and costs with their clients.

It was his view that the credit system would ensure discipline in the payment of loans.

“Ghana early next year will be introducing a credit scoring system for individuals. Every individual will have a credit score. Right now, our credit scoring system does not exist.

“So, everybody is seen as risky and the interest rates are high. But we are going to go into individualized credit scores. So, if you don’t pay your loan, you will have no credit score and you will have a problem when you go for a loan. But if you are diligent in paying your loans you get your high credit score and you are likely to get lower interest rates. This will bring more discipline,” he said.

Dr Bawumia’s policy proposal received flak from some analysts including a professor at the University of Ghana Kobby Mensah who cast doubt on the ability to roll out such a policy.

In a post shared on X on November 28, 2023, Prof Mensah asked why the Ghana Card is not being used to acquire vehicles because there are garages in Ghana already.

“Are we not in Ghana? Are there no garages in Ghana? If the answers to these questions are yes, then the case is simple.

“Take your Ghana card to CFAO to pick up a Mercedes and let’s prove the theory,” he wrote.

Also, a Vice President of Imani Africa, Bright Simons told the Dr Bawumia’s spokesperson Dr Gideon Boako that the issues that existed in credit-scoring were not unique to Ghana and could not be solved by Ghana Card.

This was after Dr Boako said that the new credit scoring system being proposed by the flagbearer of the New Patriotic Party (NPP)  Dr Mahamudu Bawumia would spur further innovation and create opportunities that will modernize and grow the economy.

Dr Boako explained that the upcoming national credit scoring system is backed by data from an individual Ghana card and will utilize a much broader range of data sources, including demographic data, financial transactions, utility payments, employment records, and other asset ownership data.

This comprehensive data coverage, he said,  provides a more accurate and holistic assessment of an individual’s creditworthiness, particularly for those with limited or no credit history.