Ghana recently launched its first national credit score system, MyCreditScore, on November 7, 2024. Led by Vice President Dr. Mahamudu Bawumia, this initiative marks a major step towards fostering financial inclusion and accessibility, especially for individuals and small businesses who have historically faced obstacles in accessing credit. The system enables Ghanaians to build individual credit scores based on their financial behavior, which in turn allows lenders to assess borrowers’ creditworthiness more accurately and tailor lending rates accordingly.
The system addresses a long-standing issue in Ghana’s lending environment, where the lack of reliable credit assessment tools has contributed to high interest rates and limited financial access. Previously, banks were forced to treat all borrowers as high-risk due to the absence of a standardized credit scoring system. Now, with individualized scores, borrowers with strong financial histories can benefit from lower interest rates, while others have an incentive to improve their credit behavior.
The launch of MyCreditScore is expected to significantly reduce the country’s high non-performing loan (NPL) rate, which stood at 24.3% in mid-2024. Initial pilot studies of the new system showed promising results, with some NPL rates dropping as low as 1.4%. In addition to improving loan repayment rates, the system is designed to promote responsible borrowing and expand access to credit, allowing Ghanaians to make larger purchases and pay in installments, ultimately driving economic growth and inclusivity.
This project has been in development since 2007, when the Credit Reporting Act was first passed to provide a framework for credit reporting. Despite initial delays, the project has now come to fruition as a result of partnerships between the Ghanaian government, the Bank of Ghana, and local private sector innovators who developed the platform
