myCreditScore: VP Bawumia launches Ghana's credit scoring system

Vice President Dr. Mahamudu Bawumia has launched myCreditScore, a groundbreaking credit scoring system that aims to transform access to credit for Ghanaians.

Supported by the Bank of Ghana, the new system enables individuals to demonstrate their creditworthiness transparently, potentially unlocking access to larger loans and favourable terms based on responsible borrowing.

The launch, held on Thursday in Accra, marks what Dr. Bawumia described as a "momentous occasion" for Ghana’s financial landscape. “It is a significant milestone in Ghana’s journey toward a financially inclusive and empowered society,” he stated. Dr. Bawumia emphasised that *myCreditScore* will serve as a vital tool for developing a credit economy in Ghana, promoting financial responsibility and trust between borrowers and lenders.

The system’s introduction addresses longstanding challenges in lending, where high default rates and a lack of credit information have constrained lending. 

With myCreditScore, financial institutions can now assess individuals’ creditworthiness more accurately, which Dr. Bawumia believes will help lower interest rates and increase credit availability. “The lack of a credit information system increases the risks of lending,” he noted. “A credit reporting system in Ghana would provide timely, accurate, and up-to-date information on the debt profile and repayment history of borrowers, which leads to numerous benefits.”

The need for this reform is underscored by recent statistics from CEIC Data, which report a high non-performing loan (NPL) rate in Ghana of 24.3% as of August 2024, with an even higher peak earlier this year. According to Dr. Bawumia, the absence of a standardised credit scoring system has amplified risks for lenders and limited financial inclusion for borrowers. *MyCreditScore*, he explained, “aligns Ghana’s credit ecosystem with international standards, promoting a culture of responsible borrowing.”

Dr. Bawumia shared that initial results from a pilot phase of *myCreditScore* showed promise, achieving an NPL ratio of just 1.4percent—a striking improvement compared to Ghana’s 20.7percent average in 2023. The Vice President expressed optimism that this tool will reduce defaults, boost financial institutions’ confidence, and broaden credit access for individuals and businesses. “This initiative reflects a broader commitment to sustainable economic growth, where financial stability and trust in credit practices play foundational roles,” he added.

The journey to a national credit scoring system dates back to 2007 when Dr. Bawumia, then Deputy Governor of the Bank of Ghana, initiated the Credit Reporting Act. However, the project stalled following a change in government in 2009. Dr. Bawumia acknowledged the Act's importance, stating, “The availability of credit information is crucial for the development and maintenance of an effective financial sector.”

Dr. Bawumia credited the project’s success to a partnership between the government, the Bank of Ghana, and the private sector, applauding local entrepreneurs for spearheading Ghana’s digital transformation. “This Credit Scoring initiative is a Ghanaian homegrown private sector initiative. We will continue to support our private sector to champion such initiatives in the digital and other sectors,” he remarked.

The Vice President concluded on an optimistic note, highlighting the broader vision of financial inclusion: “Let’s move forward with optimism and purpose, knowing that together we’re building a Ghana where financial inclusion is real, dreams are within reach, and every Ghanaian has the chance to achieve financial security and prosperity. It is possible!”