His Excellency, the Vice President,
The Honourable Minister of Communication,
Distinguished Guests,
Ladies and Gentlemen.
- Introduction
It is a pleasure to address the 2021 Mobile Technology for
Development conference under the theme “The Role of
Financial Inclusion in a COVID-19 Pandemic”. I would like to
thank the Telecommunications Chamber and the Financial
Inclusion Forum for their commitment to sustaining this event,
and also the invitation to the Bank of Ghana to be part of this
important event. This year’s event is taking place at an
unprecedented time in recent global history, and provides
an opportunity for stocking of our digitization efforts as well as
retooling strategies for effectiveness.
In March 2020, the maiden MT4D was held and the
Governor’s speech on “The Role of Regulators in Advancing
Financial Inclusion and Innovation” was read at a physical
event. Barely a month after the programme, COVID-19
evolved from an epidemic to a pandemic, scourging every
country in the world, Ghana inclusive. - COVID 19 Policies
To prevent the spread of the virus, Ghana went into
lockdown in March 2020 with restrictions on movement of
persons, shut down of businesses not considered essential,
and schools. These measures necessitated financial sector
policy responses to sustain economic activity and livelihood
by enabling remote payments and banking transactions as
well as supporting vulnerable sectors of the society.
The raft of policies implemented by the Bank were as follows:
The primary reserve requirement for banks was reduced
from 10 percent to 8 percent to provide more liquidity to
banks to support critical sectors of the economy.
Effectively, targeted reserves for small and medium
enterprises under the Enterprise Credit Scheme was
extended to all critical sectors;
Capital Conservation Buffer (CCB) for banks of 3 percent
was reduced to 1.5 percent. This was to enable banks
provide the needed financial support for the economy;
and
Provisioning for Loans in the “Other Loans Especially
Mentioned” (OLEM) category was reduced from 10
percent to 5 percent for all banks and Specialised
Deposit-Taking Institutions (SDIs) as a policy response to
loans that may experience difficulty in repayments due
to slowdown in economic activity.
Besides the above measures aimed at enhancing liquidity of
banks, the following measures were also implemented to
facilitate efficient and digital forms of payments.
Mobile money funds transfers of up to GH¢100, excluding
cash-out, was made fee free;
All mobile phone subscribers were permitted to use their
pre-existing mobile phone registration details to be onboarded for Minimum KYC Account;
Daily mobile money transactions limits and maximum
account balances were revised to enable users carry
out more remote transactions; and
Aggregate monthly transaction limits saw the most
dramatic revision as transaction limits were abolished for
Medium KYC and Enhanced KYC accounts. The only
account type with limit imposed is the Minimum KYC. - Impact of COVID-19 Policies
A review of mobile money transactional data following
implementation of the Bank’s COVID-19 financial sector
policies indicated significant uptake of digital financial
services. It was noted that inactive customers activated their
wallets while existing users increased usage of wallets. For
instance, activation of dormant wallets increased from an
average of 71,984 per week before the measures to 84,025
per week significantly, the simplified onboarding
requirements which leveraged GSM registration data
contributed to new KYC accounts of 208,120. Also, average
wallet balances increased by about 27% during the
intervening period. Furthermore, the number of active
merchants recorded a growth of 14 percent, and reflected
the growing digital payment acceptance by merchants. It
was however noted that although interoperability
transactions increased during the lockdown, it was not
remarkable compared with on-network peer to peer
transactions. This development was attributed to price
sensitivity in mobile money transactions. - New Interventions
Ladies and Gentlemen, COVID-19 pandemic has tested the
effectiveness and resilience of Ghana’s financial inclusion
efforts. In general, the strategies and the specific COVID-19
interventions have proven to be effective. Notwithstanding,
the crisis has exposed some gaps in policies and underscored
the need to revise strategies to improve their usefulness. In
response, the Bank has implemented a number of policies to
accelerate digital financial inclusion in order to reduce the
impact of COVID-19 on individuals, businesses and
governments. Among the measures implemented by the
Bank are:
Tiered Licence Categories
The Bank in July 2020 published a Licence Application Pack
under Notice Number BG/GOV/SEC/07 which provides for
various licence categories for payment service providers.
With this licensing framework, the Bank aims to promote an
inclusive environment for competitive offering of innovative
digital financial services targeting diverse customer groups in
the Ghanaian society. This is expected to boost competition
and promote financial inclusion through wide offering of
digital financial services.
Merchant Account Categorisation
An important policy intervention that has been made by the
Bank to accelerate financial inclusion is the publication of
Merchant Account Categories. In spite of the 14% increase in
active merchants, it was observed that the requirements for
onboarding merchants was steep, onerous and unfriendly to
small and medium enterprises, which constitute about 90% of
businesses in the country. This situation limits the feasible use
cases of digital payment instruments for paying for goods
and services. Also, businesses of merchants in the SME
category suffered on account of their inability to meet the
requirements for establishing merchant accounts. As a
consequence, a three tiered merchant account framework
was published by the Bank for a more inclusive digital
payment acceptance.
GhQR
Further to that, you may recall that the Ghana Interbank
Payments and Settlement Systems (GhIPSS) introduced the
first national QR Code payment solution on the continent
amidst the pandemic, and shortly after the maiden MT4D
conference. With a goal of simplifying merchant payment
and reducing the use of cash, this unified solution has been
made available to banks and payment service providers in
Ghana. With the introduction of the new merchant account
categories, we look forward to seeing merchants of all sizes,
even small food vendors, accepting payments through
GhQR.
Crowdfund Policy
Ladies and Gentlemen, while new business models are being
explored to promote financial inclusion, the Bank is also
facilitating modernization of indigenous financial services
such as “susu” with digital tools. It is for this reason that the
Bank issued the Crowdfunding Policy. The policy is expected
to encourage clubs, associations, market women and
farmers to work with entities approved and licensed by the
Bank of Ghana to provide refined susu services for our people
without the need for much physical contact and with strong
controls to guarantee safety of resources of participant.
Ladies and Gentlemen, though Covid-19 presented its
challenges to us as a country and to our economy, it also
became a potent catalyst for digitization.
Let us continue to work together as stakeholders to advance
financial inclusion by exploring innovative digital financial
services solutions that keep us safe and create economic
growth opportunities to improve livelihoods.
Thank you.
