Awareness Campaign Launched For Credit Reporting And Collateral Registry

The Bank of Ghana (BoG), in collaboration with the International Financial Corporation (IFC), has launched a one-year financial literacy, Public and Awareness Campaign on Collateral Registry and Credit Reference Reporting Bureaus.

The Collateral Registry and the Credit Reference Bureaus are two financial infrastructures, which had been created to promote responsible borrowing and ensure access to finance by the Small and Medium Scale Enterprises (SMEs) in the country.

While the Collateral Registry which was established under the Borrowers and Lenders Act, registers the of assets used by borrowers as collateral for loans, the Credit Reference Bureaus, created under the Credit Reporting Act held credit report on all borrowers of banks and other financial institutions in the country.

Speaking at the launch in Accra, the Director of the Collateral Registry under the BoG, Stephen D. Amegashie said the Borrowers and Lenders and Credit Reporting Acts, had been in existence for the past 10 years but public education on them had been low.

He said the two laws were enacted to create a healthy banking and financial industry and make access to finance to SMEs very easy.

He said the Borrowers and Lenders Act, allowed individuals and organisations to use their movable and immovable assets, as well as stocks as collateral for loans, adding that, banks were obligated to register their interests in assets used by their borrowers as security for loans.

Mr Amegashie said the Credit Reference Bureaus were also mandated to keep credit information on all the borrowers of banks and generate report on them for the banks to help in their loan advancing decisions.

He warned that individuals and organisations, which held bad credit report from a particular bank, could not access a loan at a different bank, saying, the two financial infrastructures would promote financial inclusion and reduce poverty in the country.

He expressed gratitude to SECO, the IFC and the Frankfurt School of Finance and Management for their support on public education on the Collateral Registry and Reference Bureaus.

The Senior Financial Sector Specialists Infrastructure of the IFC, Ubong Awah said Africa would have to create about 30 million jobs in the next ten years to address the growing unemployment, occasioned by increasing population growth.

He said there was the need for measures to provide access to finance for the SMEs, which created about 10 to 60 per cent of jobs in Africa.

Mr Ubong said IFC was supporting the creation of the Collateral Registry and the Credit Reference Bureaus to deepen financial penetration in the country.

The Deputy Head of Co-operation at the Switzerland Embassy, Daniel Lauchenauer, in his remarks said Switzerland and Ghana had enjoyed cordial trade and bilateral relationship since 1968 and said Ghana was Switzerland's biggest trading partner in Africa in 2016.

Mr Lauchenauer said Switzerland was committed to supporting the development of the country and it was against that backdrop that the SECO was supporting the programme to educate and sensitise the entire citizenry on the Collateral Registry and Credit Reporting System.

Godfried Cudjoe of the Fiscal Stability Department of the BoG said three Credit Reference Bureaus namely XDSData Ghana, Hudson Price Data Solutions, Dun and Bradstreet had been licensed to collect information on borrowers from the banks and financial institutions.

He said a law was being developed to make it obligatory for telecommunications and Utility Companies, as well as MASLOC and the Students Loan Scheme to provide credit information from their customers to the Credit Reference Bureaus.

The Chief Executive Officer of TMN, Charles Mawusi, mentioned floats in Accra, Takoradi, Kumasi and Tamale, radio adverts and discussions, education at the markets and lorry parks as some of the programmes outlined for the campaign.

He entreated the media to play key roles in educating the public on the Collateral Registry and the Credit Reporting Systems.

The programme is being funded by the Switzerland government under its State Secretariat for Economic Affairs (SECO) and implemented by the Frankfurt School of Finance and Management as well as Trans-Media Network.