The contagion effect of Ghana’s financial crises appears to have hit the operations of Credit Reference Bureau’s in the country.

Checks by TV3 Business reveal the closedown of banks and other financial institutions have greatly impacted on the bottom-line of the three credit reference bureaus (CRBs) namely XDS Data, Dun and Brudstreet and Hudson Price Data Solution.

The CRBs make their monies largely based on charges on subscription with unlimited usage. XDS Data, for instance, which had over 200 clients before the revocation of licenses now has just about 83 active client user base with the closure of some banks, microfinance, microcredit, savings and loans and other financial institutions.

An interview with some of the operators reveal they might be considering reviewing their rates soon due to increase in wage bill and other operating costs.

Some have also urged the Bank of Ghana to consider offering them a bailout. The hardest-hit maybe Hudson Price Data Solution, which offers much of its service to the microfinance institutions considering that the Bank of Ghana revoked the licenses of 386 microfinance and microcredit companies.

In addition, some of the Credit Reference Bureaus are reluctant to update the financial records of individuals related to the erswhile banks because TV3 Business checks show the receiver is hesitant to make payments to the CRBs.

A Credit Reference Bureau or Agency is a company that gathers and maintains data on the credit history of individuals, businesses and organizations, and make this information available to relevant users.

These bureaus also collect the personal details of the borrowers including name, address, occupation and contact address.

These agencies gather the data of the borrowing and repayment information from various sources including creditors, banks, hired debt collectors, utility providers and others.

The information gathered by these bureaus are shared with potential lenders.

The lenders use this information to determine the credit-worthiness of a potential borrower.

This is a very important tool for lenders to access the potential payback capacity of the borrower, risk and interest rate determination.