Financial services expansion; Ghana took a cue from Kenya – BoG
The Central Bank of Ghana, says it took a cue from Kenya in the use of mobile telephony to expand access to financial services in the country.
According to the Central Bank, despite initially introducing the Branchless Banking Guideline in 2008 to lay the foundation for the adoption of mobile money led by banks, activity level in terms of the use of mobile money was low till telecommunication companies took over and made massive investments into the sector.
“The success of mobile telephony in expanding access to financial services in Kenya encouraged Ghana to adopt a similar system. As a consequence, the Branchless Banking Guideline was introduced in 2008 to provide regulatory support for banks to utilise mobile phone network to provide financial services in partnership with telecommunication companies.
“However, banks were required to own and invest in the product, with telecommunication partners only acting as agents, hence the bank-led model of mobile money. Four years after the first mobile money was introduced, activity levels were far below expectations and less exciting compared with the buoyant activities experienced by Kenya and Tanzania in the early stages. An impact assessment of the Branchless Banking Guidelines 2008 indicated considerable disincentives in the bank-led model, leading to underinvestment in the ecosystem.
“Extensive consultation with stakeholders, which commenced in 2012, led to the issuance of the Electronic Money Issuers Guidelines (EMIG) and Agent Guidelines (AG) in 2015, permitting a non-bank entity (telecommunication company) to establish a subsidiary to be licensed by Bank of Ghana to issue electronic money.
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“The signal of policy change in the regulatory environment following the publication of the 2015 guidelines stimulated massive investments in the ecosystem by telecommunication companies and resulted in impressive growth in mobile money accounts and total volume of transactions from 3.78 million and 18.0 million in 2012 to 7.1 million and 113.18 million in 2014 respectively,” noted the BoG in its assessment of the evolution of its policies on Ghana’s Payments Systems over the last two decades.
According to the Central Bank, a comprehensive and coherent framework to promote issuance of electronic money by non-bank entities ramped up the use of mobile money.
“Mobile money transactions recorded a significant increase following the publication of EMIG and AG, with 106.7% and 116.6% increase in volume and value respectively year on year by end-December 2016,” it stated.
According to the apex bank, the 2017 Global Findex Report, highlighted the notable contribution of mobile money to an increase in Ghana’s financial inclusion from 41% in 2014 to 58% in 2017 – a time when total mobile money accounts was 11.1 million.
Mobile money accounts, it noted, had since recorded phenomenal growth with total accounts of 18.4 million as at end-October 2021.
“This development is quite reassuring and presents an opportunity for accelerating financial inclusion as the right foundation that has already been laid,” it added.
Find below the document detailing the evolution of Ghana’s payments system:
The Evolution of Bank of Ghana Policies on the Ghanaian Payment System by Fuaad Dodoo on Scribd
