The Financial Stability Department of the Bank of Ghana has revealed that new regulations currently before Parliament when approved will require mobile money companies among others to submit data to the credit reference bureaus.
Achieving a robust credit market would require a constant assessment of the creditworthiness of borrowers through the use of effective credit infrastructure such as the credit referencing system.
As key stakeholders in the credit referencing system, credit reference bureaus have provided financial institutions with tools such as credit reports, scores, client tracing, anti-fraud, etc. to support their lending business and essentially reduce credit risk.
But the central bank in its 2018 annual report of the Credit Referencing Activity said the current regulatory framework limits their sources of data to financial institutions and other public institutions, namely, Registrar General’s Department, Lands Commission, Collateral Registry, Ghana Police Service, and Registries of the courts and tribunals.
“This restriction has made it difficult for credit bureaus to obtain data from other sources such as the Controller and Accountant General’s Department, Telecom network operators, National Identification Authority, Retail shops, Microfinance and Small Loans Centre (MASLOC), etc. in order to enrich credit reports. This challenge would be rectified with the introduction of the Regulations,” the report stated.
Credit Reporting Regulations
According to the report, in a bid to provide for effective implementation of the Credit Reporting Act, 2007 (ACT 726) and incorporate best practices in the credit reporting system, the Bank of Ghana drafted the Credit Reporting Regulations in the year under review.
The Bank of Ghana, in compliance with Section 60 of Act 726, submitted the draft Regulations to the Minister of Finance for onward submission to Parliament.
Some of the key features of the new regulations include the provision for data submission rules, data protection and quality rules, credit bureau corporate governance requirements, dispute resolutions and sanctions for non-compliance.
Also, the draft Regulations also provide for additional sources of data for the credit bureaus and include utility companies, telecommunication companies, retailers, Student Loan Trust, etc.
The Regulations are anticipated to be promulgated by the end of the third quarter of 2019.