Loans without collateral is now possible in Ghana

Ghanaians can now access credit or loans from the banks and other financial institutions without necessarily providing any physical collateral.

Mr George Ahiafor, Chief Executive Officer of Xds Data Ghana Limited, a credit reference Bureau, said his organization had developed a system that provides credit information online about people seeking to access credit.

Credit referencing is the collecting, maintaining and sharing both demographic and credit information on individuals and small businesses with lenders on request to enable them to make informed decisions when granting credit.

He explained that financial institutions could now make decisions on individuals seeking loans from their facilities by checking on the applicants’ credit worthiness.

At a meeting to brief journalists about the system, Mr Ahiafor said the facility will give all people equal access to credit or loans, adding “Now people without land or houses can access credit from the bank based on their behaviour and credit history.”

He said credit rates are high in the country because of the default rate and reiterated that credit worthy persons could easily negotiate the credit rates.

The facility would provide credit information about people and the information would be made available to all financial institutions to prevent people from borrowing from three or four banks at a time.

Ghana enacted a credit reporting Act in 2007 (Act 726) to regulate operations of credit bureaux; the Bank of Ghana is charged with the responsibility of enforcing the Act.

The XDS Data Ghana limited is the first licensed credit reference bureau in Ghana and has about 24 banks subscribed to their system.

Mr Gerald Doorsamy, Head of Systems at XDS Data Ghana Limited, taking Journalists through the procedure for checking credit information on line, said the system allows clients to log in with a user name and password; however banks can change the password

“For now we provide Compact Trace Report about individuals to banks to assist them in their debt collection strategy,” he explained.

Mr Doorsamy said the organisation would train their clients on how to use their reports.