By Gemma Robson
For several years, the buzz surrounding mobile-based financial services has been focused almost exclusively on East Africa, particularly Kenya. The huge growth in Kenya – the so-called ‘M-Pesa miracle’ – saw a take-up by nine million customers in the first four years after the idea was conceived in 2007. 63% of adult Kenyans now have a mobile money account – outranking those that have bank accounts by over two to one.
Ghana’s introduction to mobile financial services has been comparatively lacklustre. A conservative regulatory environment, combined with a persistent preference for cash, left Ghana firmly in the shadow of its East African counterparts. In 2011, over two years after its introduction, the active user base for mobile financial services in Ghana had reached just 200,000.
However, new regulations from July last year look set to dramatically alter this landscape. Importantly, telecommunication companies can now apply directly for a licence from the Central Bank, rather than their partner banks, as was the case before. This will allow greater investment, quicker innovation and a more direct relationship between the regulator and the telecommunications industry. On top of this, an increase in the KYC requirements means more money can be transferred at each different ‘tier’– an additional incentive for customers to use their mobile wallets.
Perhaps equally importantly, the regulations on interest paid from e-money floats have also changed. As in nearly all countries, e-money issuers in Ghana are required to keep 100% of their outstanding liabilities in liquid assets held in banks, in order to safeguard customer funds. However, the question of what happens to the interest which occurs on these floats has been one of debate among regulators. Following Tanzania’s lead, Ghana’s 2015 regulations make it one of the first countries globally to designate by law that at least 80% of the interest must be returned to the consumer.
Crucially, these changes should pave the way for more advanced use of mobile financial services. Currently in Ghana, even as the use of mobile active wallets increases for transferring money from person to person, advanced uses are still low. Only 7% of active mobile financial services customers use their mobile phone to save, despite 86% saving using other means. Similarly, only 2% use mobile phones to receive payments from the government or employers, 5% to pay bills, and just 0.1% for insurance.
Yet there is potential for mobile financial services to offer a range of advanced financial services to the unbanked – currently just below 70% of Ghana’s population. As trust in the product grows, and the new regulations spur an increase in innovation, the impact on financial inclusion could be vast. With 91% of the population having access to a mobile phone, services such as savings, bill and wage payments, NGO and government transfers and even agricultural insurance could be offered to a further ten million unbanked adults. The implications of this for development – both for individual households, as well as for businesses and the economy as a whole – are still being fully explored and understood by policy makers and governments alike.
The coming years therefore look set to be an extremely exciting period for mobile financial services in Ghana. Person to person payments will continue to increase – which, in itself, represents an important step towards safe, cheap and convenient money transfers. However, it is the potential to allow up to ten million people access to a wide range of formal financial services which may well be the biggest game-changer for Ghana, and one to watch for public and private bodies alike.
Special thanks to Eleanor Sarpong, former Public Policy Manager at MTN Ghana, for her invaluable insights on the history of regulatory developments for mobile financial services in Ghana
 According to the 2015 Financial Inclusion Insights surveys (FII), 66% of adults do not have a bank account in Ghana.
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