FinTechs in both the credit and pensions space have bemoaned the challenge of existing regulations governing some aspects of financial services transactions in the country.
This, they believe is stifling growth within the sector and negatively impacting efforts being made to achieve financial inclusion.
This was brought to the fore at a stakeholder forum co-hosted by the Ghana Technology Chamber and the Ghana Chamber of Telecommunications, with support from the Consultative Group to Assist the Poor (CGAP) and the State Secretariat of Economic Affairs of Switzerland (SECO) on the theme: “New DFS Products and how they are being enabled.”
Alluding to this, a Financial Sector Specialist at CGAP, Mr. Kwame Oppong said: “This is a great product [digital credit] in high demand, with available solutions that are quick in addressing people’s needs and don’t have non-performing Loans as high as traditional banks do. The problem is when the banks FinTechs work with have to do their monthly reporting to their regulator; suddenly they appear to have a big problem with their portfolio because of the product (digital credit).”
“This is something that FinTechs need to engage with the central bank on. It probably all comes down to a conservative approach to provisioning which basically makes the product look highly unprofitable. This is something FinTechs need to engage the bank of Ghana on to understand how they make provisioning for this,” he suggested.
Re-echoing this point, the Chief Executive Officer for Jumo, Mr. Arnold Elton Kavaarpuo said using existing infrastructure set out by the regulator in Ghana was affecting the ability of some banks to provide the needed support to FinTechs.
“One of the key things I will mention is the International Financial Reporting Standard (IFRS) 9 and how the reporting for instance will affect a 30-day product. This is important because, these are standards that are set up primarily for longer-term products and it makes things difficult,” he explained.