Franklin Cudjoe raises concerns over creation of monopoly in credit scoring industry following 1,100% capital increment
President of IMANI Ghana, Franklin Cudjoe, has noted that the 1,100 increment in the minimum paid-up capital of Credit Scoring Bureaus to GHS 6m by the Bank of Ghana, is an attempt to create a monopoly in the industry.
He argues that Credit Scoring Bureaus like XDS and Dun & Bradstreet are already providing both credit reporting and credit scoring in the country and as such any new Credit Scoring Bureau that wants to provide a superior system, should simply get a Credit Bureau license from the Central Bank to compete and provide better services for the benefit of Ghanaians.
“XDS and Dun & Bradstreet are ALREADY providing both Credit Reporting AND Credit Scoring in Ghana. See images attached. If anyone wants to provide a superior system, they should just go to Bank of Ghana and get a Credit Bureau license to COMPETE and do it better for the benefit of all Ghanaians.
“Please, no one should attempt to create any monopoly in Credit Scoring in Ghana. People have already added their Ghana Card numbers to their bank accounts and mobile network profiles. That information will be reported to the credit bureaus if there is any value. After attempting to create import monopolies for rice, sugar, and yemuadi, please, let us not add loans and credit scoring to it. Akpe,” he remarked.
The Bank of Ghana (BoG) has enacted a remarkable 1,100 percent surge in the minimum paid-up capital for both existing and new Credit Bureaus, elevating the threshold from ₵500,000 to ₵6,000,000. This substantial adjustment, effective as of November 20, 2023, aligns with section 18 (3) of the Credit Reporting Act, 2007 (Act 726).
Existing credit bureaus have been granted a window until the conclusion of January 2025 to adhere to the revised minimum paid-up capital, with a perpetual obligation to sustain an unimpaired minimum capital of ₵6,000,000 thereafter. The central bank, however, strongly advocates for early recapitalization among existing entities.
“Existing credit bureaus have up to the end of January 2025 to meet the new minimum paid up capital and shall always maintain an unimpaired minimum capital of GHS6,000,000 going forward”, the statement said.
Simultaneously, the directive mandates all new and pending applications for credit bureau licenses to meet the heightened minimum capital requirement of ₵6,000,000. These funds are expected to be judiciously invested in assets delineated by the Bank of Ghana.
“All new and pending applications for credit bureau licence are required to meet the new minimum capital requirement of GHS6, 000,000.00 appropriately invested in assets determined by the Bank of Ghana”, it added.
Non-compliance with the augmented capital prerequisite is explicitly cautioned against, with the Bank of Ghana affirming its commitment to enforcing regulatory measures in accordance with section 11(1)(e) of the Credit Reporting Act, 2007 (Act 726).
The regulatory statement by the BoG indicates that the primary reason behind this move is to fortify the credit reporting landscape. The augmented capitalization is envisioned to empower credit bureaus to invest prudently, fortify their information technology infrastructures, and proffer efficacious credit reporting services, in strict adherence to the stipulations set forth by the Credit Reporting Act 726 and its accompanying regulations.
