Tamale, Feb. 14, – Mr Mawuko
Williams, a Senior Micro, Small and Medium Enterprise (MSME) Expert at the
Frankfurt School of Business and Management, has called for the adoption of a
single national Identification (ID) system to facilitate effective and
efficient credit delivery.
He said a common national ID
arrangement could boost the growth of businesses in Ghana as against the
current multiple system that hinders effective credit delivery in the country.
Mr Williams said this during a
Financial Literacy and Public Awareness Campaign workshop on Credit Reporting
and Collateral Registry for selected Journalists in the Northern, Upper East,
Upper West and the Brong Ahafo regions.
He said a multiple borrower with
different IDs bearing different names obviously would not help a lender to know
the borrower’s total indebtedness upon cross checking with the Credit Reference
Bureau.
Mr Williams said SMEs has 80
billion financing gap and if banks could make money available to them, they
would expand and more job opportunities would be created to meet the 350
million new jobs required in Africa for the next 20 years.
He said MSMEs were the engines of
growth and development responsible for over 50 percent of Gross Domestic
Product (GDP) and over 60 percent of employment.
For businesses to contribute more
to GDP, then they ought to have access to credit, hence the need for credit
infrastructure such as credit bureaus, collateral registry, and identity system
as well as insolvency regime to enable a responsible credit system, Mr Williams
said
Mr Godfred Cudjoe of the
Financial Stability Department of the Bank of Ghana said financial institutions
needed information on borrowers to be able to make an informed decision before
granting credit facilities.
He said credit reporting fills
the gap with the provision of Credit Reports (CR), hence the importance of the
Credit Reference Bureau (CRB).
“A time is coming where if you
have not obtained a loan before then, you cannot take a loan”, and this means
borrowers with good CR would have advantage over non borrowers because they
were less risky.
Mr Cudjoe said reputational
collateral could help one negotiate for a reduction in interest.
He said when going for loans,
creditors should rather look out for the Annual Percentage Rate (APR) before
making a decision, hence the need to avoid rushing for loans from one bank.
He urged creditors to cultivate
the habit of regularly checking their CR from the three licensed (xdsdata
Ghana, Hudson Price and Dun and Bradstreet) CRBs in Ghana to ensure they were
no issues with their CR.
Mr Cudjoe said broader and fairer
access to credit; better performing loans; prevention of over indebtedness;
improved profitability; and stability in the financial sector were some of the
benefits of credit referencing.
The overall goal of the campaign
is to improve access to affordable credit for the target group including SMEs,
Micro Enterprises, farmers, students and the general public.
The Financial Literacy and Public
Awareness Campaign on Credit Reporting and Collateral Registry are meant to
sensitize journalists to prioritize issues of financial literacy by educating
and informing the public to take advantage and improve their financial access.
The training was organized by the
Frankfurt School of Finance and Management in collaboration with IFC/World Bank
Group.
GNA
No comments:
Post a Comment