Dr. Benjamin Amoah, Senior Lecturer at the University of Ghana Business School’s Department of Finance, has stressed the urgent need to address rising non-performing loans in the country.
He highlighted the Ghana Card as a key tool in creating a more accountable and efficient financial system.
Speaking to the media, Dr. Amoah expressed concern about the country’s loan management challenges, noting, “The issue is the high level of non-performing loans, which clearly shows that we are having challenges with loan management in the banks.”
Dr. Amoah stressed the importance of managing the entire loan lifecycle, from the initial request to repayment.
“The process that the client will go through, the before-loan process, and the after-loan process must all be critically examined. How best do we manage the entire process to ensure that loans perform and borrowers can repay their facilities?”
He further called for a comprehensive review of the measures in place to manage loans, urging stakeholders to address gaps at every stage of the loan chain.
The Ghana Card Solution
Dr. Amoah emphasized the transformative potential of linking economic activities to the Ghana Card, describing it as a reliable national identifier that could reduce loan defaults.
“One thing we can rely on is the national identity (Ghana Card). If we can link all our economic activities to the Ghana Card, we will solve a significant problem with non-performing loans. Borrowers won’t be able to take loans from one institution and disguise themselves to take another loan elsewhere,” he explained.
Strengthening Credit Scoring Systems
Dr. Amoah also advocated for a robust credit scoring system tied to the Ghana Card. He explained, “The higher your score, the lower the rate at which you can borrow. If you mismanage a facility, it will negatively impact your score.”
He urged the government to expedite the finalization of the credit scoring process and integrate it with the Ghana Card to ensure transparency and accountability in the credit system.
According to Dr. Amoah, implementing these reforms will help build a credit-based financial system capable of tracking defaulters and ensuring economic stability.
“If we can do this, the entire system will be built on credit. It will be so robust that if an individual defaults on a loan, they can easily be tracked,” he concluded.
The call to action underscores the need for innovative solutions to bolster financial discipline and reduce loan delinquency rates across the country.
