VP Bawumia launches Credit Scoring System for Ghana

The Vice President and Presidential Candidate of the NPP, Dr. Mahamudu Bawumia, has launched myCreditScore, an individualised credit reference and scoring system for Ghanaians.

Backed by the Central Bank, the Credit Score System, offers individual Ghanaians opportunity to demonstrate their credit worthiness transparently, through a scoring system, which will also enable Ghanaians access to credit, to make life easier.

Through the credit scoring and reference system, individuals who demonstrate credit worthiness by scoring points, will be rewarded by financial institutions for their financial responsibility by being able to access larger credit.

Launching the historic credit scoring system in Accra on Thursday, Dr. Bawumia said it marked a "momentous occasion" and a "step forward in building a dynamic credit economy for Ghana and for all Ghanaians."

"It is a significant milestone in Ghana’s journey toward a financially inclusive and empowered society," Dr. Bawumia said, adding that the launch of myCreditScore, also represents "yet another chapter in the nation’s ambitious journey toward financial inclusion."

SOLUTION TO AGE-LONG LENDING PROBLEMS

Dr. Bawumia, who spearheaded the project, said, myCreditScore introduces a critical tool that transforms the Ghanaian's access to credit and also addresses age-old challenges related to lending and borrowing, as the financial sector will be able to accurately access the credit worthiness of individuals, which he believes, will help address high lending rate.

"The lack of a credit information system increases the risks of lending, and causes financial institutions to provide less credit. A credit reporting system in Ghana would provide timely, accurate, and up to date information on the debt profile and repayment history of borrowers and would lead to a number of benefits, " Dr. Bawumia said.

"This initiative comes at a crucial time for Ghana’s financial sector. Recent data from CEIC Data reports that as of August 2024, Ghana’s non-performing loan (NPL) rate stands at a troubling 24.3%, with an unprecedented peak of 26.7% earlier this year."

"Such high NPL levels reflect challenges within our financial ecosystem, where the lack of a standardized, transparent credit scoring system has contributed to elevated risks for lenders and limited financial inclusion for borrowers."

"The introduction of myCreditScore represents a pivotal step toward addressing these challenges, aligning Ghana’s credit ecosystem with international standards and promoting a culture of responsible borrowing."

Expressing optimism about the launch, Dr. Bawumia revealed that a pilot project has already recorded positive outcomes.

"Results from the MyCreditScore pilot demonstrate a stark improvement, achieving an NPL ratio of just 1.4%—a remarkable contrast to the 20.7% average reported in 2023 by the Bank of Ghana."

Dr. Bawumia expressed further optimism that by enabling a fairer and more consistent evaluation of creditworthiness, MyCreditScore is expected ''to reduce defaults significantly, strengthen confidence among financial institutions, and expand access to credit for individuals and businesses alike."

"The initiative reflects a broader commitment to sustainable economic growth, where financial stability and trust in credit practices play foundational roles,"

"With the implementation of systems like MyCreditScore, Ghana is poised to transition into a financial ecosystem that not only facilitates responsible borrowing and lending practices but also drives economic resilience and inclusive growth for all stakeholders."

17 YEAR JOURNEY FULFILLED

Expressing satisfaction at the realisation of an individualised credit scoring system for Ghana, Dr. Bawumia recalled how the journey started in 2007 when he was Deputy Governor of Bank of Ghana, with the passing of the passage of the Credit Scoring Act by Parliament in 2007.

However, he noted that the project did not progress further, following the change of government in 2009.

"The purpose of the Credit Reporting Act (Act 726) is to provide a legal and regulatory framework for credit reporting in Ghana. The availability of credit information is generally accepted to be crucial for the development and maintenance of an effective financial sector. Borrowers tend to have a natural incentive not to reveal negative information about themselves," he said

EFFECTIVE PARTNERSHIP WITH THE PRIVATE SECTOR

Dr. Bawumia said the launch of MyCreditScore, represents another successful story of effective partnership with government and the private sector.

While expressing gratitude to the Bank of Ghana and other stakeholders for their support towards the successful launch of MyCreditScore, Dr. Bawumia also paid tributes to the ingenuity of the local private sector, who he noted, have developed all digitalisation initiatives he has championed.

"My thanks to the Governor of the Bank of Ghana, Management and Staff of the Bank, for making this possible. This Credit Scoring initiative that you have licensed and which we are launching today is huge and Ghana will forever be grateful."

"I am also excited that this initiative is a Ghanaian homegrown private sector initiative . We will continue to support our private sector to champion such initiatives in the digital and other sectors.

"Let’s move forward with optimism and purpose, knowing that together we’re building a Ghana where financial inclusion is real, dreams are within reach, and every Ghanaian has the chance to achieve financial security and prosperity. It is possible!"