Spokesperson and economic adviser to the Vice President, Dr. Gideon Boako, has called on Bright Simons and Franklin Cudjoe to apologize for what he considers misleading comments regarding Vice President Bawumia‘s statements on the credit scoring system in Ghana.
During the 57th graduation ceremony at the Kwame Nkrumah University of Science and Technology, Vice President Bawumia praised the Ghana card for its potential in establishing a robust credit scoring system to uniquely identify borrowers.
In response, IMANI Ghana’s Vice President sought to undermine the accuracy of the Vice President’s information, a sentiment echoed by IMANI’s President, Franklin Cudjoe. They referenced credit bureau company XDSDATA Ghana Limited, claiming it already had the system the Vice President mentioned.
However, XDSData Ghana Limited clarified through a press release that it has not produced individual credit scores in the country. Dr. Boako, in a separate post on Twitter and Facebook, challenged Simons and Cudjoe to apologize for their comments.
XDSData acknowledges its capability to generate individual credit scores but highlights challenges due to the absence of a unique identifier. According to the Managing Director, George K. Ahiafor, Ghana Card penetration currently stands at 35%, tracked by the Bank of Ghana (BoG). Ahiafor anticipates the release of individual credit scores when Ghana Card penetration reaches 90%, expected by the end of 2024.
Presently, facilities are accessed using various forms of identification, making it challenging for the bureau to capture a credit subject’s total exposure accurately.
However, Mr. Ahiafor emphasized that XDSData produces credit information comparable to international credit bureaus, providing adequate data for lenders to make informed credit decisions.
He disclosed that the mandatory use of the Ghana Card for all financial transactions since July 1, 2022, has led to Data Providers submitting Ghana Card information to the bureau.
However, he said credit scoring models require unique identifiers for comprehensive mapping of information, and the slow pace of Ghana Card information penetration remains a challenge.
Mr. Ahiafor highlighted the importance of active participation and support from the Bank of Ghana to ensure credit bureaus receive adequate Ghana Card data from Data Providers.
He explained that this collaborative effort aims to incorporate all aspects of the credit ecosystem into scoring calculations.
Ghana is set to introduce a credit scoring system for individuals next year, with the Ghana Card becoming the anchor for the credit system.
Vice-President Mahamudu Bawumia has revealed ongoing discussions with Ghanaian automobile companies to facilitate citizens purchasing cars on credit, with Solar Taxi being one of the companies involved in the initiative.
The proposed credit scoring system aims to establish a reliable credit history, fostering trust and discipline within the financial sector. This announcement has sparked intense debate in the country, with some asserting that individual credit scoring is already in practice, prompting XDSData to clarify its position.
In the intricate realm of personal finance, a numerical indicator known as a credit score holds significant influence in shaping an individual’s financial journey. This score, reflecting one’s creditworthiness, is determined through a meticulous analysis of factors such as repayment history, types of loans, credit history length, debt utilization, credit mix, and recent account applications.
A credit score plays a pivotal role in a lender’s decision-making process, influencing eligibility for products like mortgages, personal loans, and credit cards, as well as determining associated interest rates.
The importance of a credit score in an individual’s financial life cannot be overstated. A higher credit score increases the likelihood of loan approval and secures more favorable interest rates. Conversely, lower credit scores may result in declined loan applications or higher interest rates, as lenders perceive higher risk.
Lenders are more inclined to approve individuals with higher credit scores for loans with lower interest rates, reflecting a perception of lower risk. On the flip side, those with lower scores may encounter challenges in obtaining credit or face less favorable terms.
Understanding the dynamics of credit scores empowers individuals to make informed financial decisions. Regularly monitoring one’s credit report, ensuring accuracy, and actively working towards improving creditworthiness can have a profound impact on long-term financial well-being.
In essence, a higher credit score not only opens doors to financial opportunities but also translates into potential savings over time.