Bawumia is right; a personal credit-scoring system does not exist in Ghana - Dr. Theo Acheampong

An economist and political risk analyst, Dr. Theo Acheampong, has asserted that there is currently no personal credit-scoring system in Ghana and that Vice President Dr. Mahamudu Bawumia is right.

Speaking at last week's congregation of KNUST in Kumasi, Dr. Bawumia announced plans to roll out a personalised credit-scoring system in Ghana next year, with the Ghana card as a catalyst for the system, which he said, would help distinguish between high and low-risk borrowers.

Following Dr. Bawumia's announcement, a Vice President of Imani Bright Simons, questioned the Vice President's statement, claiming the Vice President is wrong because there is currently a credit scoring system in Ghana.

It had, however, turned out Bright Simons got his understanding of the situation wrong, as he confused credit reports to financial institutions with credit scoring of individuals.

In a lengthy post on X (formerly Twitter) to explain the issues, Dr. Theo Acheampong said, Dr. Bawumia is rather right because current records and practise support him.

"Dr Bawumiah is right in the sense that an INDIVIDUALISED CREDIT SCORING does not exist in Ghana," Dr. Theo Acheampong wrote.

Referencing the Bank of Ghana’s 2022 Credit Reporting Activity Report, Dr. Theo Acheampong explained that what is in existence, by three credit bureaus "are involved in collecting credit data and providing credit referencing services to financial institutions," and not credit scoring for individuals, as announced by Dr. Bawumia.

Dr Theo Acheampong continued: "It is important to note that the products and services offered by the Credit Bureaus are not INDIVIDUALISED CREDIT SCORING. Rather, these come in six (forms), namely:"

"In other words, the current data provided by the credit bureaus are amalgamated reports comprising different data points such as personal details, credit account summary, address history, guarantor details and telephone history," he explained.

"The companies, for one reason or another, are unable to combine this information into a COMPOSITE CREDIT SCORE such as offered by the likes of companies like Experian and TransUnion here in the UK where I am based, and which can allow the pricing of individual financial products and services."

"In terms of evidence, I have attached my Experian score, which currently sits at 961 out of 999 and is rated excellent. With this single number, I can access various products, including credit cards, loans, insurance, and other financial products."

During the announcement, Dr. Bawumia added that the Ghana card will be the new individualised credit-scoring system. This, Dr. Acheampong also backed, describing it as 'sensible."

"I am by no means an IT expert, but leveraging the Ghana Card to become the anchor of the credit system and, thereby, meet the ultimate goal of a personalised credit score is a sensible idea that all must support.

"The Ghana Card has a lot of primary data points, so it makes sense that it becomes the master key/ID by which one can bolt on all sorts of additional information. We don't yet have that ability in Ghana to pull disparate pieces of info into a single metric score as the UK does."

"In essence, to move from a report to a SCORE [on which more nuanced] financial decisions can be made, there is a need for additional data points, and I think the Ghana Card closes such a gap. It won't be all kosher, as there'll be many iterations, but we must move from just reporting to composite scoring."