Vice President, Dr. Mahamudu Bawumia
The Vice President Dr. Mahamudu Bawumia, has said that the new credit-scoring to be rolled out next year – 2023, will help distinguish between high-risk loan defaulters and diligent creditors.
Announcing plans to introduce the system, which is practiced in most advanced countries, Dr. Bawumia also said, the new system, which will be anchored by the Ghana Card, will also help trustworthy creditors to benefit from lower interest rates.
“Ghana, early next year will be introducing a credit-scoring system for individuals. Every individual will have a credit score,” said Dr. Bawumia, the new flagbearer of the NPP.
“Right now our credit-scoring system does not exist so everybody is seen as risky and the interest rates are high.”
“But we are going to move into individualised credit scoring. So if you don’t pay your loans, you’ll have a low credit score and if you go for a loan, you’ll have a problem. But if you are diligent in paying your loan, your credit score will be high and you’re likely to get a lower interest rate and you’ll have more discipline as a result,” Dr. Bawumia explained.
The Vice President further explained that the Ghana Card will become the anchor for the credit system, which means any individual who uses their Ghana Card to access a credit facility can be traced anywhere in Ghana.
Dr. Bawumia added that he has visited some car manufacturers in Ghana, including Solar Taxi, and they are keen on giving cars on credit to people to work and pay in installments, once they register with their Ghana Card.
“All they will need at the point of transaction will be your Ghana Card and they will give you a car and then you work and pay over time.”
A credit-scoring system is a statistical analysis deployed by financial institutions and lenders to assess a borrower’s creditworthiness.
It helps the lender to determine who is a high-risk or low-risk borrower, and the credit score of an individual can determine the maximum amount the person can borrow, as well as the interest rate to be applied.
In countries where there are no individualised credit-scoring systems, everyone is considered a high-risk borrower, and this generally affects interest rates, which are normally high across board.
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