Banking consultant calls for accuracy of data collected for Credit Reporting System

Nana Otuo Acheampong1 Nana Otuo Acheampong, Banking Consultant

Mon, 9 Aug 2021 Source: www.ghanaweb.com

•The BoG has been urged to ensure data collected for CRS must be accurate

•Otou Acheampong believes wrong information could impact pricing of credit and unfair practices on innocent borrowers by lenders

• The CRS is a database established to promote the sharing of information on the credit history of debtors with lenders and other users on the platform

The Bank of Ghana has been tasked to ensure the accuracy of data collected from institutions participating in the Credit Report System.

This comes after the central bank last week announced that is has expanded a list of institutions required to partake in the Credit Reporting System (CRS) established under the Credit Reporting Act, 2007 (Act 726). The CRS is a database established to promote the sharing of information on the credit history of debtors with lenders and other users on the platform.

Reacting to the development, Nana Otuo Acheampong said inaccurate data collected will hamper the likelihood of innocent borrowers being subjected to unfair treatment by lenders.

“Pricing of credit is primarily looking at the risk complexion of the borrower, and so the better the risk, the better the price that will be put on that credit. So this is in a way going to help both the borrowers and the lenders because borrowers with good credit will get access to cheap credit, those with bad credit will access more expensive loans,” he told Citi Business News.

“It is a good start, but the problem that we may have is with the accuracy of the records that we have. We have instances where after paying for loans, banks still have inaccurate information on borrowers years later, which will affect your credit worthiness. So, with the expansion of the list, we have to ensure accurate records are kept so no one is disadvantaged,” Acheampong advised.

A statement issued by the central bank explained that the expanded list for the Credit Reporting System will entail; retailers, utility companies, mobile money operators, financial technology firms, telecommunication companies and government entities that offer credit to Micro Small and Medium Enterprises.

Others, the BoG stated, will include ones that provide the relevant documentation, entities that supply goods and services on a post-paid or instalment basis, student loan schemes provided by private or government agencies that comply with permissible purposes of credit bureaus.

The central bank further notified the public of some three licensed credit bureaus operating in the country to take steps to comply with the provisions of Act 726 by 31 October 2021.

Source: www.ghanaweb.com