Mobile money takes over from banks as the main driver of financial inclusion in Ghana

The World Banks fourth Economic Update Report on Ghana has shown that the financial inclusion in the country is largely being driven by mobile money platforms rather than banks.

Mobile money takes over from banks as the main driver of financial inclusion in Ghana

According to the report, of the 17% points increase in access to formal financial services between 2010 and 2015, mobile money alone accounted for 7% while banks contributed only 2%.

Also, mobile money and other non-bank financial institutions contributed an additional 8%.

The report noted that within a five-year period, a lot more people are using mobile money platforms and other non-bank financial institutions to access financial services, such as paying bills, sending and receiving money among others, rather than the traditional method of using banks.

What has accounted for this change in paradigm, the report says, is the rapid penetration of mobile phones in the country. This has made Ghana the fastest-growing mobile money market in Africa. The total number of mobile voice subscriptions grew 39% from 25.6 to 37.4 million between 2012 and 2017, resulting in a six-fold increase in registered mobile money accounts between 2012 and 2017 – from 3.8 million to 23.9 million.

Banks, on the other hand, have recently contributed the least to increasing financial inclusion across the country, as a result of their lack of focus on offering financial solutions to everyday Ghanaians. They have instead focused on corporate banking and high net worth individuals, the report stated.

The World Bank has among its recommendations urged government to take the lead in expanding access to formal financial services using collection and payment of utility bills.

“While government to person payments are nearly all electronic, there are untapped opportunities for digitising government collections – the majority of which are still paid in cash. Similarly, digitising payments for electricity and water, which are almost exclusively still paid in cash, will bring significant convenience to millions of people, deepening financial inclusion further.”

It added that the “Current approaches remain piece-meal, and clear direction from government is needed to further push existing projects in these areas. To do so, financial and technical support to the Ministries, Departments, and Agencies (MDAs) and utilities is required to update their internal accounting systems."

“This would allow full integration via open application programme interfaces (APIs) into institutions such as GhIPSS, allowing for individuals to use their bank account or mobile wallets to pay for government services or utility bills,” the report said.

The World Bank Country Director, Dr Henry Kerali while speaking at the launch of the report recently noted that Ghana is the fastest growing mobile money market in Africa.


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