Banks directed to Build Credit Profile of Borrowers

The regulator of the banking sector, the Bank of Ghana (BoG) has announced that commercial and universal banks in the country will soon be required to build credit profile of borrowers in the country.

According to the central bank, this forms part of a number of macro-prudential and market conduct regulatory measures to help boost credit to Small and Medium Scale Enterprises (SMEs).

First Deputy Governor of the BoG, Dr. Maxwell Opoku-Afari said the move by the central bank is also to foster more competition in the banking sector and in the process help under lending rates.

At a 2-day training workshop organized by the Journalists for Business Advocacy (JBA) in partnership with Ecobank Ghana held in Accra, Dr. Opoku-Afari said as a result of the measures, banks will be required to develop and publish a clear framework on the risk premium build-up that impacts on an individual borrower’s credit profile.

Apart from this, Dr. Opoku-Afari mentioned that central bank will direct all banks to set aside 2 percent of their primary reserves to support targeted lending to SMEs as part of the Enterprise Credit Scheme announced in the 2020 budget by Finance Minister, Mr. Ken Ofori-Atta.

The training was under the theme: ‘Understanding Financial Sector Reforms’ .

He noted that there is also an avenue to explore the possibility of setting a minimum loan to deposits ratio to ensure that more deposits mobilized by banks are channeled to viable private sector projects.

“The central bank is working closely with the banks to ensure that they do not pass on their operational inefficients and overhead costs to the clients by aligning compensation with overall bank performance,” he added.

Head of Corporate Affairs at Ecobank Ghana, Madam Rita Tsegah, called on financial journalists in the country to write accurately on financial issues to educate the public. According to her, there are a lot that Ecobank Ghana is doing to bridge the financial illiteracy gap in the country.

“I entreat on you to help champion the financial inclusion among the Ghanaian populates,” she stated.

President of JBA, Sulaiman Mustapha, said the training program started 5 years ago when the group approached Ecobank Ghana to train financial journalists on effective reporting.

He disclosed that next year being an election year and financial issues will be one of the Centre point for many sectors of the economy, so it is up to financial journalists to communicate effectively about financial issues to the public.

He said financial reforms taking place in the country needs accurate reportage from those financial journalists who understand the issue to report accurately.

According to him, next year the group will start by training the members before the general and Parliamentary election campaign starts.

The training is the 5th in the series and over 200 journalists have benefited from it so far since its inception.

Source: Fred Yaw Sarpong