The Bank of Ghana (BoG) is urging players in the financial sector to report to the regulator if the credit reference bureaus are not living up to expectation.
It is also imploring the players to make the credit market infrastructure work since it is one of the best ways of tracking bad defaulters and therefore helping to address the high non-performing loans in the banking industry.
Second Deputy Governor of the Bank of Ghana, Elsie Awadzie who disclosed this at a recent meeting with stakeholders of the banking industry said “Please let’s all make the credit market infrastructure works. If the credit bureaus are not working well please let the Bank of Ghana knows.”
Per the banking sector reforms in 2006, the Bank of Ghana introduced the Credit Reporting Act, 2007 (Act 726), to provide a framework for credit reporting and other related matters.
The Act empowers the Bank of Ghana to have overall supervisory and regulatory authority in all matters relating to credit reporting.
The Central Bank therefore monitors the operations of credit bureaus and financial institutions to ensure compliance with prescribed standards and statutory requirements.
This activity includes credit bureau licensing, data provider operations, data protection, dispute resolution, submission of reports, application of sanctions and other incidental matters.
Mrs. Awadzie urged the banks to make use of the credit reference bureau companies to track the credit history of the borrowers to make an informed decision in appraising credits. “Please access reports from the credit reference bureaus and make informed decisions.”
The Central Bank in recent times have been working hard to sanitize the banking industry, particularly bringing down the high NPLs and also helping to improve liquidity among banks.
NPLs stood at 23.4 percent at the end of April 2018, while loan loss provision was 12.3 percent.
The Credit Reference Bureau or Agency is a company that gathers and maintains data on the credit history of individuals and businesses.