New credit bureau launched

DUN and Bradstreet Credit Bureau Limited, an organisation that will provide comprehensive consumer credit information to customers in the country, has been launched in Accra.

The bureau receives information and processes them for lending and credit institutions to build borrowers’ credit profile and repayment records.

This form of reputational collateral has proven to be as reliable as the usual physical collateral demanded by lenders in support of credit.    

Dun and Bradstreet was incorporated in Ghana in June 2008 and awarded a provisional Credit Bureau License from the Bank of Ghana in October 2010. After fulfilling the requirements of a provisional license, it received its final license in February, 2012.

The launch, which makes Dun and Bradstreet the third credit bureau in the country, is expected to increase competition within the Ghanaian credit market by providing credit providers with greater bureau choice and improved transparency for businesses and consumers.

Again, it is expected that as the availability of credit increases, businesses and consumers will enjoy more credit.

The government passed the Credit Reporting Act, 2007 (Act 726) not only to provide the necessary legal and regulatory mechanism for the licensing and operation of credit bureau, but also to protect the public against fraud.

The Minister of Finance and Economic Planning, Mr Seth Tepker, in an address read on his behalf said the services of credit bureau therefore facilitate screening of applicants for credit, leading to cost reduction for the provider and enhances lender’s ability to predict default.

“Rapid growth has direct correlation with an increased risk of low repayment. Credit bureau provides the best mechanism to improving the rate of default and mitigating the threat to the financial system.”

‘Also the demand for consumer credit will increase lending to general increase in demand for goods and services thereby increasing growth in the economy,” he said.

He emphasised the need to promote convergence, integration and development of the entire financial service sector in order to exploit the full potential for effective financial intermediation and sustained growth.  

He also announced that the government had developed the second phase of the Financial Sector Strategic Plan (FinSSP 1) that focused on strengthening all sub-sectors of the financial sector, including banking, securities, insurance, pensions and non-bank financial institutions, with implementation planned for next year.

Touted as a global leader in business information reports, the Managing Director of Dun and Bradstreet, Mr Evans Sarpong, said it would from its portfolio of global products and services offer a range of tools to help lenders manage their clients through the entire life cycle and better understand risks involved.   

This, he said, included instant notification when changes occurred within a customer portfolio and tools needed to improve the quality of customer data.

“In order to provide responsible access to credit for businesses and consumers, it is important for banks and other credit providers to have access to globally proven alternatives to determine the credit worthiness of potential borrowers,” he said. 

The Chief Executive Officer of Dun and Bradstreet, Mr Miguel Llenas, said the experience of credit bureaus in other countries showed that over time, borrowers stood to benefit from faster credit applications processing, faster disbursement of loans, fairer assessment and better adjusted quantum.

He said the organisation’s experience with government and private credit bureaus across the world had facilitated it in building the robust bureau for Ghana.