Searches on the database of credit bureaux increased by 46.5 per cent from 9,379,499 in 2022 to a total number of 13,745,137 in 2023, the Bank of Ghana’s annual report on credit activities has indicated.

It said these searches were conducted by financial institutions and other authorised users of the Credit Reporting System.

This “significant” increase, the report noted, was a result of the integration of credit reports in the provision of digital loans by respective lenders.

An average of 2,114,636 enquiries were conducted by financial institutions and authorised users monthly.

This resulted in an increase of 46.5 per cent compared to 1,443,000 average monthly enquiries in 2022.

The bank said these increases also demonstrate the level of acceptance of credit reports in the credit management processes among all types of institutions.

The central bank explained that searches conducted on credit bureau databases by authorised users could result in a “Hit” or “No Hit”.

“A Hit search means that searches returned some information on persons or institutions being searched upon. The returned information could be only demographic or both demographic and financial information. In 2023, 72.0 per cent of searches conducted returned a hit compared to 85.0 per cent in 2022,” the report mentioned.

It said this reduction was “expected due to the high number of searches relating to digital loan applications. This was partly because some digital loan applicants who were searched by lenders were first-time borrowers resulting in 2,465,396 ‘No Hit’ searches out of the total 3,863,537 ‘No Hit’ searches. This represents 64.0 per cent of total ‘No Hit’ searches.

“As a result of improvements in the submission of digital loan records to credit bureaus the Bank of Ghana anticipates higher search hit rates in the ensuing year. This is relevant as a high level of hit searches is a measure of the depth of credit information in the databases of credit bureaus and the integrity of the CRS,” the central bank added.

It revealed that 97.0 per cent of searches conducted on the database of credit bureaux were conducted on individual borrowers.

Searches conducted on corporate customers of lenders increased by 70.4 per cent from 277,315 in 2022 to 472,579 in 2023.

“This increase has been consistent over the years accentuating the continuous influence of credit reports in the facilitation of private-sector credit,” the report said.

It noted that banks conducted the highest number of enquiries on the credit bureaux with a total of 10,698,100 searches representing 77.8 per cent of total enquiries.

“While this is a reduction from 85.0 per cent in 2022, searches conducted by microcredit companies increased from 5.9 per cent to 11.0 per cent. This was largely due to the increased involvement of microcredit companies in digital loan provision. Searches among savings and loan companies and rural banks also increased compared to the previous year.”