The Bank of Ghana has completed the development of a Portal which will enable financial institutions submit same data to all credit bureaus at the same time or period.
This Portal would eliminate challenges like difficulty in connecting to credit bureau platform with different interfaces, passwords and protocols for data submission. Inconsistent and multiple error logs received from credit bureaus. Time and Data bandwidth consumption.
It is anticipated to go Live by the end of July 2018.
The Bank of Ghana in conjunction with the International Finance Corporation (IFC) completed the tendering process for a consultant to undertake a program to sensitize and educate the public on the credit reporting system. The process which started in 2016 was completed in 2017 with the formation of a Working Group to spearhead its implementation with the consultants of the project.
The programme was officially launched in April 2018 and the public education which is ongoing is expected to continue throughout 2018. It is aimed at creating awareness and improving credit delivery in the banking sector.
The Bank of Ghana has supervised the activities of credit reference bureaus since the promulgation of the Credit Reporting Act, 2007 (ACT 726). It has however become necessary for the introduction of regulations to provide for areas of interest with respect to credit referencing activities that are not clearly provided for in Act 726 and incorporate best practices in the credit reporting environment.
In view of this the Bank of Ghana has developed a draft Regulation to cover areas such as: Additional Data Providers , Penalties , Standards for filling and handling data at the credit bureau , Operational guidelines for credit bureau , Submission of data to credit bureaus ,Credit bureaus submission of returns to the Bank of Ghana ,Access to credit reports by credit information subjects, Use of Credit Reports , Data Retention , Recourse Mechanism.
In spite of the successes of the credit reporting system, the industry is confronted with challenges like Data quality.
The introduction of the common reporting format for financial institutions has improved data submission. However poor data quality remains a challenge for effective operation of the credit bureaus. Notable data quality challenges include Lack of critical demographic information such as Identity Information (ID), incorrect or lack of Date of Birth and residential addresses of borrowers, Critical financial information such as outstanding balance, transaction dates, incorrect facility status, Some of these issues arose due to non-compliance with Know Your Customer (KYC) procedures and lack of review or monitoring of data before submission to credit bureaus.
Inconsistent Data Submission,
Majority of the complaints/disputes received resulted from the failure of financial institutions to regularly update customers’ credit records with the credit bureaus.
These 26 anomalies were observed in all subsectors and resulted in a number of customers being wrongly denied credit facilities.
By Adu Koranteng