A development economist, Dr Frank Bannor has described the government’s decision to introduce a credit scoring system in Ghana this year as a step in the right direction.
Speaking on the Asaase Breakfast Show on Wednesday (8 May), Bannor called for revamping of the tax system to enhance the effectiveness of the credit scoring system.
“Implementing a credit system is a good idea but it is incomplete without the revamping of the tax system,” he said.
“Basically, in as much as we are trying to implement a credit system, we should also try to revamp our tax system,” he added.
A credit-scoring system is a statistical analysis deployed by financial institutions and lenders to assess a borrower’s creditworthiness.
It helps the lender to determine who is a high-risk or low-risk borrower, and the credit score of an individual can determine the maximum amount the person can borrow, as well as the interest rate to be applied.
In countries where there are no individualised credit-scoring systems, everyone is considered a high-risk borrower and this generally affects interest rates, which are normally high across board.
Listen to excerpts of the interview in the attached audio clip below:
Reporting by Fred Dzakpata in Accra
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