Working in concert with the International Finance Corporation, Ghana passed the Credit Reporting Act of 2007, which established licensing and operational guidelines for the credit referencing industry, and obliged financial institutions to share data with licensed credit bureaus. Since that time, Ghana has been slowly building its credit referencing capacity with the aim of expanding credit, with a particular focus on the small and medium-sized enterprise (SME) sector. “In the absence of alternative institutions, the banks are the logical and only choice for SMEs to approach for funding. This results in banks at times having to fund both equity and debt. The net result is greater cost to SMEs as rates applicable to this combination are greater than for debt financing,” Robert Le Hunte, managing director of HFC Bank Ghana, told OBG.

XDSD ata Ghana, a subsidiary of XDS South Africa, became the first licensed credit bureau in Ghana in December 2008, commencing operations in 2010. A second bureau, Dun & Bradstreet, a subsidiary of the US-based firm of the same name, was licensed and began operations in March 2012.


Credit coverage has expanded dramatically in the five years since the first licence was granted. According to the World Bank, private credit bureau coverage in Ghana grew from 2.1% of adults in 2010 to 16.3% in 2015. Aiding in the sector’s growth, the Bank of Ghana (BoG) expanded the pool of available data in 2013 by imposing reporting requirements on non-bank financial institutions, which have emerged as an entry point into the financial system for lower-income Ghanaians. It is expected that microfinance institutions will soon also be required to report data as the BoG tightens regulation of that segment.

Early Days

 Despite growth in coverage and information, the credit referencing industry is just getting started in Ghana. The bureaus are streamlining their processes and fine-tuning their delivery mechanisms. “We use credit bureaus in our credit assessment,” Daniel Anderson, manager of the Ridge branch at HFC Bank, told OBG. “One of the challenges in using the referencing agencies is that not all banks and institutions provide up-to-date information. Also, the report is not regularly updated so you can have a situation in which a customer’s account has been settled, but on the report it shows that they still owe money.”

Work To Do

The industry faces a number of obstacles in moving towards delivering comprehensive and reliable data. A primary challenge is the need for an identification system that works on a national level. “One of the key challenges is the lack of a national identification system and a proper housing registry,” Kwame Baah-Nuakoh, senior vice-president for marketing, research and corporate affairs at The Royal Bank, told OBG, “This means that when a person defaults, you may not even know where the person lives because we don’t have a proper housing system or a proper national identification system, such as the social security number in the US or the national insurance number in the UK. The National Identification Authority was set up about five years ago, but no one has a national ID yet.” As a result, banks and other financial institutions are focusing their lending efforts on existing customers. Echoing the sentiment of others in the financial industry, Joe Jackson, director of business operations at Dalex Finance, told OBG, “If you can save GHS5 ($1.30) a month, you can afford to pay GHS5 ($1.30) a month and I can offer you a loan.”

While measures such as these provide adequate short-term solutions, the efficiency gains from a more robust credit referencing industry are necessary for Ghana to realise its goals of expanding the provision of credit to spur economic growth.