John Mahama proposes US$50 million fintech growth fund

Former President John Dramani Mahama has announced plans to establish a US$50 million growth fund dedicated to supporting innovative start-ups in the domestic fintech sector, in a bid to accelerate its growth if he regains power in this year’s presidential election.

Mr. Mahama, who served as President from 2012 to 2017, expressed confidence in the potential of the fintech sector to drive economic growth and financial inclusion in the country, pledging to invest heavily in the space if Ghanaians give him the nod in December’s elections.

“We did it for the pharmaceutical industry. We gave them US$10 million to scale up and put up new production lines, and that enabled them to start exporting their drugs to our neighbouring countries for the first time. So, when I say we will do it for the fintech industry, I mean it,” the former president said during a roundtable discussion with leaders in the country’s fintech ecosystem in Accra.

“The next NDC government will promote and nurture innovation hubs through public and private partnerships to harness technology to address Ghana’s development challenges and working with partners, we shall establish a US$50 million fintech transformative growth fund to address the teething financial needs of Ghanaian-owned fintech,” he stated.

Fintech innovators, he added, will be groomed to be technology entrepreneurs under this policy to be able to build businesses on their innovations, attract investments, and create jobs.

Mr. Mahama further disclosed that a “separate body” would be established to administer the fund, ensuring adherence to standards of transparency, fairness, and equal opportunities based on merits.

Regulatory revamp

In addition to the US$50million fund, the former president said the next NDC administration shall streamline the regulations governing the digital financial space to encourage active participation and healthy competition amongst diverse players within the fintech industry.

This, he said, is necessary because, in spite of the fact that diversity and competition drive innovation and enhance user experience, the current regulatory regime is stifling that.

“I know that young persons with brilliant ideas eager to contribute their quota to the national agenda are facing rigidities in the application processes because of the generally difficult and financially constraining fintech operational environment.

“I’ll, therefore, actively ensure Ghanaian participation in a buoyant, diverse and competitive fintech ecosystem for the ultimate benefit of our people. There shall be no political colourisation of the licensing process” he emphasised.

Bridging the gender gap

Again, the next NDC administration, Mr. Mahama espoused, will expedite measures to bridge the disturbing gender disparity in the country’s financial inclusion efforts.

According to him, the continuous widening of the gap between males and females, notwithstanding the gains in promoting financial inclusion, is worrying.

Citing the global FINDEX report, he said in 2014, the financial inclusion gender gap was 3 percent more male access than female in the service category. This inequality gap increased to 8 percent in 2017 and went up again to 11 percent in 2021.

“This trend is unacceptable and needs urgent attention if we are to put Ghana on the path of sustained and inclusive development considering that women form almost 51 percent of the population and own about 44 percent of micro and small and medium enterprises in Ghana,” he said, warning that the exclusion could undermine sustainable development efforts.”

Fintech presents significant opportunities

Speaking at the interaction, Martin Kwame Awagah, President of the Ghana Fintech and Payment Association, said the industry represents a significant opportunity for the country to leapfrog traditional banking infrastructure and provide accessible financial services to all citizens.

He cited access to capital as one of the biggest challenges for fintech start-ups in the country.

The establishment of the growth fund, he said, will therefore undoubtedly fuel innovation and drive the sector forward.

Mahama’s pledge comes at a time of rapid growth and innovation in the domestic fintech landscape, with start-ups disrupting traditional banking services and expanding access to financial products for underserved communities.

Mr. Awagah lauded the former President’s commitment to supporting the fintech industry, saying it signals a promising future for innovation and economic development in the country.