Key anchors such as the Ghana Card, which provides a unique identity and essential information about the bearer including bank accounts, sim card, SSNIT, NHIS and many more, and the National Digital Property Address System, which provides a definite location for the borrower, have already been put in place and the other planks should be in place very soon to enable credit scoring, the Vice President stated.
A credit reference agency is an independent organisation that securely holds data – including things like one’s credit applications, accounts, and financial behaviour. This data is then used to generate a credit score, essentially stating ones credit worthiness and helping to determine how much, if any premium should be put on any application for a loan or hire-purchase.
Speaking 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, 15 July 2022, Dr Bawumia said what makes some countries appear more developed is the systems they have put in place to ensure life becomes easier and simpler, and the Akufo-Addo administration has since its inception worked hard, leveraging technology, to infuse digitization into everyday life in order to accelerate the country’s development.
“We are changing the economy, we are changing the system. The reason why 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. Those systems that will make sure that you cannot hide and 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 it will reduce bureaucracy,” he stated.
“More importantly, we are building a credit system in Ghana. By the end of this year, because we have linked all our bank accounts to the national ID number the Ghana Card, for the first time in our history, credit reference agencies are going to be able to undertake credit scoring in Ghana. This would be the first time in our history.
“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 doesn’t pay back loans you will have a very low credit score and the banks wouldn’t 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,” he explained.
“We are building this economy, this new system which will help everybody, because the old system is one where you didn’t have transparency, but the whole society was paying for this lack of transparency. We have high interest rates, for instance.
“But through digitization, we have put in place the necessary systems, so that now tertiary students can get loans without guarantors. In the near 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,” he told the youth.