Campaign on collateral registry and credit reference bureau system launched

The World Bank in collaboration with the International Finance Cooperation (IFC) and the Bank of Ghana on Wednesday, April 18 launched a public awareness campaign and financial literacy on collateral registry and credit reference bureau system in Accra.

The campaign which seeks to educate Ghanaians on the need to have good credit histories and periodically check on their credit worthiness with reference bureaus would be taken to other regions across the country.

Speaking at the launch, Manager of Financial Stability Department at the Bank of Ghana, Augustine Amoako Donkor said, the campaign aims at easing the stress businessmen and women go through in accessing loans.

According to him, Credit referencing provides key information about the potential borrower that the financial institutions will need and speeds up the process of borrowing.

He said, every financial institution demands collaterals before giving out loans and explained that the collateral registry and credit reference is not a replacement of that process but rather seeks to enlighten Ghanaians on their “credit worthiness”.

“Some financial institution may request for a collateral as a cushion but some after assessing your credit history will be satisfied that if this is what an individual or business could do then there is no need to request for a collateral. Your credit reference is going to talk a lot about you, and it is going to talk about your credit worthiness,” he said.

The collateral registry and credit reference bureau system he said, has being in operation since 2009 but public awareness on it has being low, therefore, he said, “This campaign seeks to educate the general public that with a good credit reference one could secure a loan without collateral and with a heavy valued assert, one can secure different loans with one collateral” .


BACKGROUND

The Collateral Registry is a body established by Parliament under the borrowers and Lenders Act, 2008 [Act 773] to principally register charges and collaterals created by borrowers to secure credit facilities provided by lenders. Besides registrations, the Registry also provides information on the existence of relationships between lenders and borrowers as they relate particularly to movable and immovable collateral[s] as well as other ancillary functions.

The vision of the Registry is to assist in energizing the credit delivery system through the provision of efficient and world class collateral registry services, whilst the mission is to play a key role in creating an enabling environment to ensure easy access to credit.

The mandate of the Collateral Registry is a response to the teething problems in Ghana’s credit market which eventually constrain or stifles the flow of credit to Small and Medium sized Enterprises [SMEs] in particular and the economy as a whole.