Digital financial ecosystem improvement gathers steam

Dr. Ernest Addison, Governor, Bank of Ghana (BoG)

With most of the digital financial products available in Ghana’s financial ecosystem focused on payments, savings, investment and insurance, the Bank of Ghana and the Financial Sector Deepening (FSD) Africa is collaborating to implement a credit market diagnostic project.

The project will assist in identifying constraints to credit delivery and propose measures to overcome them. In effect, this will complement efforts towards expanding the scope of financial access to both the banked and unbanked in society.

The digital financial ecosystem only has a few institutions providing easy access to short-term loans via borrowers’ mobile phones. Currently there are only two well-known electronic credit lending institutions, these being, FIDO Money Lending Limited and Afb which offers its Qwikloan, through MTN Ghana’s mobile platform..

At the launch of the Phase II of the mobile money interoperability in Accra, the Governor of the Bank of Ghana (BoG), Ernest Addison said “digital credit products have received less attention thereby limiting the capacity of the unbanked and underserved to borrow for economic activities.”

Deliberate and concerted efforts to develop an electronic credit market are necessary to promote financial inclusiveness, the Governor insisted.

Mobile Money Interoperability

Since the implementation of the first phase of the interoperability platform, the total transaction value and volume have increased from GH¢8.3 million and 96,907 respectively in May 2018 to GH¢32.6 million and 319,094 respectively in September 2018, representing 292.8 percent and 229.3 percent growth in value and volume respectively.

With the roll-out of the second phase of mobile money interoperability, industry operators are being offered a huge opportunity to develop and offer various value added services to the public, Addison said.

However, he challenged Fintechs to work closely with banks, non-bank financial institutions and especially rural and community banks to come out with other products and services that will bring banking and financial transactions closer to the public.

Safeguarding the ecosystem

The integrity of transmission channels in a digital financial ecosystem has become paramount, in order to guarantee security of transactions of electronic payments.

Consequently, the Bank of Ghana has drafted Guidelines on Operations of Electronic Payment Channels which will provide a framework for management of an efficient and secure transmission of electronic transactions across various payment channels.

By Joshua W. Amlanu