BoG, IFC to raise awareness on Collateral Registry, Credit Reference Reporting

The Bank of Ghana (BoG) in partnership with the International Financial Corporation (IFC) of the World Bank (WB) has launched a one-year financial literacy and public and awareness campaign on Collateral Registry and Credit Reference Reporting (Bureaus).

The Collateral Registry and the Credit Reference Bureau are two financial systems (infrastructures) which have been created to promote responsible borrowing and ensure access to finance by the small and medium scale enterprises (SMEs) in the country to finance their business operations.

While the Collateral Registry which was established under the Borrowers and Lenders Act, 2008, Act (Act 773) was responsible for the registration of assets used by borrowers as collateral for loans, the credit reference bureaus, created  under  the Credit Reporting Act, 2007 (Act 726),  held credit report on all borrowers of banks and other financial institutions in the country.

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

Speaking at the launch in Accra, the Director of the Collateral Registry under the BoG, Stephen D. Amegashie, who chaired the programme, said the Borrowers and Lenders and Credit Reporting Acts, had been in existence for the past ten years, 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.

With the enactment of the Borrowers and Lenders Act, he said individuals and organisations could use their movable and immovable assets, as well as stocks as collateral for loans, indicating 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 measures need to be instituted to provide access to finance by the SMEs, which created about 10 to 60 per cent of jobs in Africa, saying it was in that direction that the IFC had supported 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, and Dun and Bradstreet have 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 utilities companies, as well as MASLOC and the Students Loan Scheme to provide credit information to 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.

By Kingsley Asare

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