Bawumia credit rating system holds great promise for Ghana

Michael Ampadu, NPP Communications Officer

Michael Ampadu, the communications officer for the Bristol chapter of the New Patriotic Party (NPP) in the UK, has made a compelling argument in support of the proposal by the party’s flagbearer, Dr Mahamudu Bawumia, to implement a credit rating system in Ghana.

In a statement shared on his social media platforms, Michael Ampadu noted that the creation of an effective credit rating system will significantly improve Ghana’s economy.

He noted that a credit rating system will promote the country’s digitalisation agenda and facilitate the purchase of goods and services on credit by Ghanaians.

In the educational article, Michael Ampadu pointed out that a credit scoring system will improve financial literacy in the country and also help people control their spending habits.

Read the full statement below

The implementation of an individual credit scoring system in Ghana is a crucial step in advancing the country’s digitalisation agenda. This approach, which has already been successful in advanced countries, offers numerous benefits that can boost economic growth and financial inclusion in Ghana.

In advanced countries, credit scores provide a standardized assessment of creditworthiness, allowing banks and financial institutions to offer loans and credit products more efficiently. For Ghanaians, this would mean greater access to mortgages, car loans, and personal loans with favorable terms. Such accessibility could stimulate entrepreneurship and personal development throughout the country.

In advanced countries, people with a good credit rating can negotiate lower interest rates on loans and mortgages, thereby reducing borrowing costs. In Ghana, a similar system could encourage financial institutions to offer competitive rates to reliable borrowers, making credit more affordable for those with a good credit rating.

In advanced countries, a comprehensive credit system can identify financially disciplined individuals and promote financial inclusion. In Ghana, the implementation of a credit scoring system could integrate unbanked and underbanked populations into the financial system, supporting national financial inclusion goals and reducing reliance on cash transactions.

Regular monitoring of credit scores fosters financial literacy and responsibility among consumers in advanced countries. By educating Ghanaian citizens on the importance of maintaining good credit habits, the system can promote financial discipline, savings and investment.

A consolidated credit scoring system adds an extra layer of verification and security, reducing fraud in advanced countries. In Ghana, such a system could mitigate fraud in loans and financial transactions, fostering a safer financial environment.

The implementation of a credit scoring system aligns with digital economic initiatives by integrating modern financial technologies. It complements digital payment systems and e-commerce, fostering a robust digital financial market. A digital credit scoring system simplifies financial services, making it easier to apply for and obtain credit online. This promotes the use of and trust in digital financial services.

Microfinance institutions can better assess and manage risks with a credit scoring system, which encourages them to offer credit products to small and medium-sized enterprises (SMEs) and start-ups, thereby fostering economic growth. A credit scoring system helps the government conduct detailed economic analysis and formulate policies, leading to more targeted and efficient financial regulations and development programs. In addition, a digital credit scoring system ensures that credit decisions are data-driven, reducing bias and improving equity in credit distribution.

Furthermore, the NPP government’s efforts to centralize and authenticate identification through the National Identity Card (Ghana Card) make the implementation of the credit scoring system in Ghana even more feasible. The Ghana Card provides a reliable and universal identification system, which is essential for accurately tracking and assessing individual credit histories.

By instituting a credit rating system, Ghana will benefit substantially from the experiences of advanced countries. This measure, proposed by His Excellency Dr. Mahamudu Bawumia, supports the digitalization agenda by facilitating seamless integration of financial services, enhancing financial inclusion, and promoting wealth creation and economic development through responsible borrowing and spending habits. Implementing a robust credit rating system will require collaboration between government, financial institutions, and technology providers to ensure its effectiveness, security, and benefits to all stakeholders in Ghana. All Ghanaians should embrace this as a game changer.