Fintech Association advocates dedicated Fund to spur financial inclusion

The Ghana Fintech and Payments Association has advocated for a dedicated Fund to provide catalytic investment for Ghana’s financial technology (fintech) and services sector.

The Fund is to promote direct investment into fintech start-ups, support the building of critical infrastructure, establish ideation hubs, and conduct relevant industry research to inform policy and regulatory purposes.

That, Mr Richard Nunekpeku, Vice President, Legal and Strategy, Ghana Fintech and Payments Association, said would address the quality and usage issues in financial inclusion, thereby, help bridge inequalities, reduce poverty faster, and improve economic growth.

He was speaking at the maiden Ghana Financial Inclusion conference, held by the Ministry of Finance on Wednesday, June 26, 2024, in Accra, and on the theme: “Accelerating financial inclusion in a digital era.”

He noted that fintech had the power to bring affordable financial services to the underserved, and empower individuals and communities, and called on all stakeholders to support initiatives to build the sector, sustainably.

As of 2015, the country’s financial inclusion, in terms of access, championed by increased Mobile Money (MoMo) transactions, was 58 per cent, but had reached 96 per cent as of 2022, the Ghana Financial Inclusion report noted.

In 2022, the volume of MoMo transactions reached 5.07 billion, with a total value of GHS1.07 trillion, while active MoMo customers and agents recorded a growth of 9.8 per cent in the same year.

Nonetheless, financial inclusion, in terms of quality and usage, remained a challenge, the report noted.

To comprehensively solve the challenges in the fintech ecosystem to drive financial inclusion, Mr Nunekpeku advocated for Ghana to have a dedicated investment fund through a public-private partnership.

“We need a dedicated investment fund because financing has become a critical way of leveraging the growth that we expect from the sector. If we do not have a dedicated fund, it’s going to be a challenge for young people raising funding for the initiatives that they have,” he said.

The Fund, he said, should be used to, among others, sustain advocacy, training, and capacity building for stakeholders in the fintech value chain, particularly young Ghanaians who are driving innovations in the sector.

It should also be used to support innovations and technological advancement, nurture entrepreneurs to create jobs, strengthen regulatory compliance, and enable sustainable development, he said.

“When we build the fund around these objectives, we will begin to see very positive use cases coming out of any fund that’s established,” Mr Nunekpeku, said.

He recommended that the management of the fund should comprise both public-private players, including associations, regulators, financial institutions, and development partners, with a Secretariat to man its daily operations.

Professor George Yaw Baffour-Gyan, who spoke on behalf of the Vice President, Dr Mahamudu Bawumia, said the financial sector, including fintech, contributed 47 per cent of Ghana’s Gross Domestic Product (GDP), underscoring its relevance to the growth of the economy.

He said the government had taken many efforts to enhance fintech sector resilience to enable it to withstand shocks, and create a robust financial ecosystem that promoted greater financial inclusion.

Notable among them were the National Financial Inclusion and Development Strategy, Cash-lite roadmap, mobile money interoperability, and QR code payment system.

“Collaborative efforts between the government, private sector, and international partners, are necessary to tackle these issues and build a secure and inclusive financial ecosystem,” he said.

He called for more support to the government’s digitalisation drive to deepen financial inclusion, through the promotion of innovation and impact in the designing and use of financial technology in the country.

Dr Alex Ampaabeng, a Deputy Finance Minister, indicated that the country, through its National Financial Inclusion and Development Strategy, had made progress in breaking barriers of access to financial services.

“This achievement is largely attributed to the exponential growth in mobile money adoption, transforming the financial landscape, and empowering millions of Ghanaians with access to affordable and quality financial services,” he said.

He said the establishment of the National Cyber Security Centre, and the implementation of the Cybersecurity Act 2020, had led to the safeguard of consumers and financial institutions, resulting in a 30 per cent reduction in cyber security incidents.