The Managing Director of CAL Bank, Mr. Frank Adu Junior has appealed to the Bank of Ghana to immediately design clear guidelines to regulate activities of telcos engaged in financial activities.
According to him, a clear policy direction stating the extent to which telcos can roll out financial products will aid customers and properly enhance the drive for financial inclusion.
Mr. Adu, who spoke to Citi Business News in an interview, maintained that it would be in the interest of the financial sector if clear policies are outlined by the central bank and the National Communications Authority to collaborate the activities of the two sectors.
“I am calling for a policy direction, that’s all. I think that too many things are left to develop in this country without dimension. Look, today, one of them is advertising a loan product” he said.
He was of the opinion that providing funds to the informal sector must be properly regulated to create confidence in Ghana’s financial system.
“Its financial inclusion, it allows you to go borrow money from a mobile company, but it also says that I will charge up to 20 percent commission on the amount that you borrow for a month, that in financial terms is a 240 percent per annum interest rate on a borrowing. You think that should be allowed to happen?” he queried.
Mr. Adu who was unhappy about the development warned that the financial sector could face the same debacle that hit the microfinance sector recently due to improper supervision.
“You cannot sit there and let that happen. The same way we sat there and let the microfinance companies evolved without restrictions under the same ambit of financial inclusion. Financial inclusion, we all go for it but it must controlled and be in the policy frame work,” he stressed.
Meanwhile sources at the Bank of Ghana have hinted to Citi Business News that the Bank of Ghana is currently deliberating on financial activities of telcos in the country.
Recent growth of mobile money
In recent times, mobile money has gained substantial increase in the value of transactions from GH¢2.4billion in 2013 to about GH¢11.6billion in 2014.
The value of mobile money transactions put into perspective is more than a third of the total deposit liabilities of the 28 banks in the country as at the end of 2015.
Currently, only three of the six mobile telcos — MTN, Airtel and Tigo– are involved in the mobile money business, which has grown from a transaction value of GH¢171million in 2012 to a multi-billion cedi sector.
By: Lawrence Segbefia/citibusinessnews.com/Ghana