Mobile Money and Ghana’s Financial Stability: A Data-Driven Look Beyond the Alarms
Professor Stephen Adei is a voice that commands attention in Ghana, and for good reason. His recent contributions to the discourse on financial technology, particularly the concerns he raised about the scale and regulation of MTN’s Mobile Money (MoMo) as reported by NorvanReports (https://norvanreports.com/mtns-shadow-banking-empire-is-ghanas-financial-stability-at-risk/) in the final week of May 2025, serve as a vital call for vigilance. The rapid growth of financial technology indeed brings new complexities and potential risks alongside its immense benefits. The questions raised about market dominance, regulatory adequacy, and systemic risk are crucial and merit a serious and ongoing examination.
This conversation, however, must be grounded in an understanding of the existing regulatory framework and the latest financial data. While the concerns are valid, a closer examination reveals that some of the more alarming characteristics of the sector raised by Prof. Adeimay do not align with the current reality. This analysis aims to provide additional context to the important debate Professor Adei has sparked.
Myth of the “Quasi-Banking Empire”: Understanding the Regulatory Reality
A central concern is the characterisation of MTN MoMo as a “quasi-banking empire” or a “de facto bank” operating without equivalent banking regulations. This view, however, overlooks the specific and robust framework under which these services operate.
MTN Mobile Money Limited is licensed and actively supervised by the Bank of Ghana (BoG) as a Dedicated Electronic Money Issuer (DEMI). This is not a regulatory grey area; it is a formal license class established under the comprehensive Payment Systems and Services Act, 2019 (Act 987). This Act provides a specific set of rules covering:
- Licensing and minimum capital requirements
- Stringent safeguarding of all customer funds (the “float”)
- AML/CFT compliance
- Consumer protection and operational standards
While the prudential regime for EMIs differs from that of universal banks, this is by design, reflecting their different risk profiles and the strict prohibition on EMIs lending directly from customer funds. It is not an absence of regulation, but a proportionate and targeted regulatory approach.
The Float vs. Bank Deposits: Putting the Numbers in Perspective
A particularly startling assertion was that MTN’s float is “nearly three times the total deposit base of the entire Ghanaian banking sector” and sits “largely outside the formal banking system.” This claim is far from what current data reveals:
- MTN Ghana’s MoMo Float: Approximately GHS 25.48 billion as of Q1 2025.
- Total Banking Sector Deposits: Approximately GH¢230.1 billion as of March 2024.
This places MTN’s float at approximately 11% of total bank deposits. While this is a substantial figure that underscores MoMo’s systemic importance, it is considerably less than the 300% suggested by Prof. Adei.
Furthermore, the idea that the float sits “outside the formal banking system” is factually incorrect. BoG regulations mandate that 100% of the MoMo float must be held in trust accounts at licensed commercial banks. These funds are, by law, domiciled within the regulated banking system and are protected for the benefit of customers.
Following the Money: Forex, Remittances, and Digital Loans
Concerns about a “currency drain” from remittances and a “shadow lending” market are significant and deserve scrutiny. However, here too, the regulatory framework provides clear directives.
- Forex and Remittances: The Bank of Ghana’s Updated Guidelines for Inward Remittance Services (November 2023) explicitly require that international money transfer operators (MTOs) credit the nostro accounts of their partner universal banks in Ghana. This framework ensures that foreign currency inflows are channelled into the Ghanaian banking system under the Bank of Ghana’s oversight, rather than being retained offshore.
- Digital Lending: The notion of “shadow lending” is addressed by Act 987, which prohibits Electronic Money Institutions (EMIs) like MTN from lending directly from their float. The digital credit products offered on MoMo platforms (e.g., Qwikloan) are underwritten by licensed financial institutions, including banks and Special Deposit Institutions (SDIs). These partners bear the credit risk and are subject to the Bank of Ghana’s full lending regulations. The EMI platform acts as a crucial channel for inclusion, but the lending itself originates from a regulated entity.
Addressing the Question of Scale and Regulatory Posture
Professor Adei is right that MTN MoMo is “too big to ignore.” Its systemic importance is undeniable. The primary systemic risk likely lies in operational resilience—the assurance of uptime, cybersecurity, and business continuity—an area where the BoG’s oversight is critical.
The critique of the regulatory response as “timid” or subject to “policy capture,” however, may discount the significant evolution of Ghana’s fintech regulation. The journey from the initial EMI Guidelines in 2015 to the robust Payment Systems and Services Act, 2019 (Act 987) and the establishment of the BoG’s dedicated Fintech and Innovation Office suggests an adaptive and progressively robust regulatory posture.
Conclusion: A Shared Objective
The concerns raised about managing the risks associated with large, dominant fintech platforms are valid and crucial for our ongoing policy dialogue. The goal of this analysis is to contribute to this conversation by demonstrating that the basis for sounding the alarm bells should be carefully weighed against the existing and evolving regulatory realities.
Ensuring a financial system that is innovative, inclusive, and stable is a shared objective. The best path to achieving it is through continued, informed discussion, grounded in accurate data, verifiable facts, and a comprehensive understanding of our regulatory landscape.
