BoG assures safety in digital financial market

The Deputy Governor of the Bank of Ghana, Millison Narh, has said the bank will soon initiate measures and policies that will ensure supervision in the digital finance market which will protect consumers against fraud.

“We assure you that the bank is undertaking additional measures to facilitate digital finance in Ghana. The bank will soon initiate a process to revise the Electronic Money Issuers (EMI) guidelines. It is expected that the revised guidelines would assist to remove any impediments to scaling up financial inclusion with digital technology…Adequate safeguards would have to be put in place to protect the consumer from fraudsters and agents of mobile money operators,” he said.

According to Mr. Narh, the move has become necessary because of the impact financial inclusion has on poverty reduction and economic growth; as well as the increasing rise of electronic fraud, which data from the central bank indicates, accounts for more than 80 percent of all complaints and fraud cases the central bank receives.

Mr. Narh was speaking at the launch of the “Ghana Digital Financial Services Initiative” in Accra organized by the International Finance Corporation (IFC) , together with the State Secretariat of Economic Affairs of Switzerland (SECO), and the Consultative Group to Assist the Poor (CGAP).

The 2015 Global Index Survey revealed that Ghana has made significant progress in promoting financial inclusion. According to the report, the proportion of adult population using formal financial services rose from 29.4 percent in 2011 to 40.5 percent in 2014.

This, Mr. Narh said, can be attributed to the bank’s intervention to introduce some policies such as the National Payment Systems Strategy, which seeks to promote the use of electronic payment over cash; and the EMI and agent guidelines aimed at promoting safe and secure issuance and acceptance of digital money.

Mr. Narh further stated that the central bank’s interventions led to a marked increase in mobile money transactions within the past three years in which the amount of mobile money float balances with partner banks was GH?223.3million in 2014 to GH?547.9million.

He added that the bank has developed a web portal to gather data on digital financing from industry players which would be operational by the third quarter of the year, adding that, stakeholders must support the project by sharing relevant information and also complying with safeguards in the industry.

The $5.6million Ghana Digital Financial Services Initiative which is funded by SECO will provide regulatory and market capacity and also provide direct advisory services to two industry actors to increase the reach of digital financial services in support of inclusive economic growth.

The IFC Head of Financial Institutions Group Advisory in Sub-Saharan Africa, Riadh Naouar, said as part of the project, his outfit will provide direct technical assistance to two digital financial services providers for two years to help build their capacities to help better their services.

He urged all stakeholders to take keen interest in making financial services available to low-income earners, micro-entrepreneurs, smallholder farmers and rural populations to promote equality of opportunity and inclusive economic growth.

Additionally, the Head of Operations of SECO, Economic Cooperation and Development, Ivo Germann, said that the full implementation of the project will make financial services cheaper and more accessible to customers, thereby creating the opportunity for financial services providers to expand their business.