An investment banker, Dr Prince Abbey, has said the current financial set up in the country favours the rich more than the poor thereby perpetuating financial exclusion rather than inclusion.
He fears if nothing is done about the situation, the intended role of the financial system in the economy would not be realised.
In an interview with the Goldstreet Business, Dr Abbey, who is also the Executive Director of Pessewa Global, advised banks to be innovative and design electronic-based products which can take care of pensions as well as direct debit to facilitate credit payment and instalment payment for the poor.
He called on the banks especially to also look at the social side of their business decisions and reach out to the informal sector so as to rope the poor into the banking system.
“Currently we are making business decisions that are not socially sustainable making the poor poorer and the rich, richer. We are not building a society that will build your business forever. Your business will fail.”
He contended that financial exclusion arguments can also be made in the area of private placement where a limit is placed on who can participate by way of the person’s financial standing, automatically excluding a class of people on the basis of their financial strength.
Dr Abbey asked for a liberalisation of the process by way of crowd sourcing – a system which allows anybody with any amount to invest in a company – as it happens elsewhere, to allow the not-too-privileged to also participate with their small amounts.
Private placement is a situation where a non-listed company, raises money through private individuals to fund her business contrary to the publicly listed companies which do so by public offer.
He described the current cumbersome procedural set up of the Ghana Stock Exchange (GSE) as one that only succeeds in alienating young people from investing in the stocks, giving a field day to only the rich locals and foreigners to monopolise the stock market.
“The GSE has made the process very complicated and it can be better”
On mobile money, the investment banker disagreed with the excitement insisting that the very need of the poor has not been addressed by the system but rather only facilitating payments.
By Godfred Tawiah Gogo