FinTechs in both the credit and pensions space have bemoaned the challenge of existing regulations governing some aspects of financial services transactions in the country
This was brought to the fore at a stakeholder forum co-hosted by the Ghana Technology Chamber and the Ghana Chamber of Telecommunications, with support from the Consultative Group to Assist the Poor (CGAP) and the State Secretariat of Economic Affairs of Switzerland (SECO) on the theme: “New DFS Products and how they are being enabled.”
Alluding to this, a Financial Sector Specialist at CGAP,
“This is something that FinTechs need to engage with the central bank on. It probably all comes down to a conservative approach to provisioning which basically makes the product look highly unprofitable. This is something FinTechs need to engage the bank of Ghana on to understand how they make provisioning for this,” he suggested.
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Re-echoing this point, the Chief Executive Officer for Jumo,
“One of the key things I will mention is the International Financial Reporting Standard (IFRS) 9 and how the reporting
Cost making digital pensions space unattractive
CEO of IT Consortium,
“FinTechs run recurrent costs regardless of whether a transaction goes through or not. We need to push informal pensions whether it is to a farmer, house help or market woman and that makes it difficult,” he said.
According to him, when the New Pensions Act (2008) was put together, there was no money put aside for other channels like the Telcos and FinTechs, hence, making it difficult for them to make meaningful revenue.
“If the regulator can come in with a specific fee for our channels, it will help a lot. We need to have a discussion with the regulatory bodies and government that will include FinTechs because we can't get to the last mile without FinTechs,” he explained.
Financial inclusion; the regulator’s role
Stakeholders at the forum also acknowledged that the regulator had a crucial role to play in deepening financial inclusion especially, in backing their products to
“The presence of the regulator helps especially in this present atmosphere for people to know there is some authority backing the product,” Mobile Financial Services Manager at Vodafone,
Stressing on the importance of regulator backing, Mr. Bugyei said: “We had the regulators with us at the launch [of My Own Pension] and the assurance that the money sat with a bank, with the regulator having full oversight over it, gave a lot of comfort and confidence to prospective subscribers knowing that the product is fully backed by regulator.”
Looking into the future
Deputy CEO of the National Pensions Regulatory Authority (NPRA),
“The technology should be simple for users and that helps. They need to know their rights and what the law does for them if something goes wrong. For me, the big issue
He further talked about digital pensions and interoperability saying, “the issue of being able to port among providers is very crucial - can we make the movement seamless?”
“Can we tie in pensions contributions into tax payment so that a portion of tax paid goes towards a person’s pensions contribution? So you pay ‘X’ in taxes and have ‘Y’ out of that going towards their tax as a contribution,” he said.
On his part, CEO of the Ghana Chamber of Telecommunications,
At the end of the forum, it was generally agreed that a lot more could be done on the part of both the regulators and the FinTechs to further improve the Digital Financial Services sector in the country.