The Bank of Ghana says it is working to bring on board lenders outside the banking sector in an effort to expand the existing credit referencing database.
The central bank, in its 2019 Credit Referencing Activity report, stated that this process will enable these lenders to share their credit information with the banking sector through the credit referencing system.
Ghana’s credit referencing system was established following the passage of the Credit Reporting Act 2007 (Act 726). It was part of reforms introduced to strengthen the credit market to enable lenders obtain reliable information to evaluate the creditworthiness of borrowers.
According to the central bank, the use of the system continues to see modest gains.
Last year, a total number of 2,820,946 enquiries were made on the databases of credit bureaus, representing an increase of seven percent from the 2018 figure.
The report explained that 61 percent of all the enquiries were regarded as hits, as these searches produced some information on the persons being searched upon.
The remaining 39 percent searches did not produce any information as a result of unavailability of credit information of the persons being searched, poor data quality or inconsistencies in identification information, among other factors.
Commenting on the challenges of the credit referencing system, the bank said the absence of a unique identifier in the credit market has become a major contributory factor to the relatively poor quality of information in the credit referencing database.
That notwithstanding, the Bank of Ghana added that it has strengthened its surveillance of financial institutions and credit bureaus to ensure that institutions which violate the credit referencing regulations are sanctioned.
The report also praised the role the credit referencing system is playing in loan recoveries, particularly relating to the customers of defunct financial institutions.