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BOG to implement Credit Market Diagnostic Project

The Bank of Ghana (BoG) is to implement a credit market diagnostic project to improve the credit services delivery in the digital financial industry in the country to promote financial inclusion, the Governor of BoG, Dr Ernest Addison has said.

He said the objective of the project was to move the focus on digital financial services on savings, payments, investments and insurance to credit products and services.

Dr Addison who disclosed this in Accra on Wednesday, at the launch of the Second Phase of the Mobile Money Interoperatability (MMI) platform said the project had become necessary to move from savings, payments, investment and insurance to credit services in the digital financial sector.

“Currently, most of the digital financial products available in the Ghanaian ecosystem are in the category of savings, payments, investments, insurance.  Credit products receive less attention thereby limiting the capacity of the unbanked and underserved to borrowing for economic activities.  A deliberate and concerted effort to develop an electronic credit market is therefore necessary to promote financial inclusiveness,” he said.

The programme, which will be implemented in partnership with the Financial Sector Deepening (FSD) Africa, is meant to indentifying constraints to credit delivery and propose measures to overcome them and complement efforts towards expanding the scope of financial access to both the banked and the unbanked in society.

Dr Addison said the launch of the second phase of the MMI was another milestone in the quest to deepening financial intermediation and inclusion, while “digitising the economy and levelling the playing field for both the banked and unbanked”.

The first phase of the project which started in 2007 was launched in May 2008, and the MMI is meant to integrate three payment systems, namely mobile money, Ghana National Switch (e-zwich) and the Ghana Inter-bank Payment and Settlement Systems (GhIPPS).

Dr Addison said the performance of the interoperatability platform since implementing the first phase had been impressive and helped to promote convenience and accessibility and value for money for digital financial services.

“Since then, total transaction value and volume has increased from GHȻ8.3 million and 96,907 respectively in May 2018 to GHȻ32.6 million and 319,094 respectively in September 2018, representing 292.8 per cent and 229.3 per cent growth in value and volume respectively,” the Governor said.

Dr Addison said the growth trend was expected to increase further when the second phase became fully operational and other innovative products and services became available.

The Governor paid glowing tribute to the Vice President, Dr Mahamudu Bawumia for his  unflinching support and dedication of the development and implementation of the home grown project initiated in 2007.

He said as the sole regulator of the mobile money sector, the BoG would ensure that the “right things are done by the various players in the sector and will continue to regulate and monitor activities within the space and ensure that all participants ply by the rules”.

“The BoG has a key responsibility to safeguard the integrity of the financial system to underscore the truest that is central to financial deepening and development,” he said.

Dr Addison stressed that it was critical to ensure the confidentiality of transactions, privacy of data collected by operators in this space (including personal financial data), the security of transactions, and smooth operations of all stakeholders and regulators providing complementary services in the space.