Mobile Money On the Rise in Ghana

By Andrew David And Gifty Danso

The World Bank, along with its subsidiary the Consultative Group to Assist the Poor (CGAP), presented their findings on global financial inclusion, access to banks, mobile money, and other financial services.

While Ghana, and the rest of the world, have experienced significant increases in account ownership of all types of financial services, it was made evident that mobile money has been Ghana's backbone in financial inclusion and has spurred increases in account ownership to other financial services , held at the Kempinski Hotel, Accra.

While the current African leaders of mobile money account ownership are Kenya at 73%, Uganda at 51%, and Zimbabwe at 49%, mobile money activity in Ghana has led to an up-tick in financial inclusion.

Ghana is now one of the fastest growing mobile money markets in sub-Saharan Africa. Tanzania, an early touted African success story in regards to mobile money, begun a year ahead of Ghana and had 8 million active accounts whereas Ghana had just 350,000 in 2009, yet now 39% of adults in both countries have accounts.

According to the findex report, on a presentation done by Buddy Buruku of CGAP, Ghana has been progressive with mobile money accounts with a surge of 11 million active mobile money accounts, representing a thirty times increase from 2012.

The report indicates that regulatory revisions also drove the increase in mobile money activity in Ghana. Additionally, the EMI (electronic money issuers) guidelines introduced by the bank of Ghana contributed to the growth of mobile money in the country.

"The regulatory revisions that took place in Ghana were very principled in this trajectory. If you look at the data, 85% of industry growth, 71% of active account growth, 79% of transaction volume growth, and 84% of transaction value growth, all happened after the promulgation of the EMI guidelines. So those EMI guidelines which have been touted as really being flagship guidelines issued by the Bank of Ghana, had demonstrably lead to significant increases into the market" - Buddy said.

Likewise, there are 151,000 active mobile money agents in the country, also resulting in a twenty-five times increase since 2012. The number of transactions too, stand at 82 million average per month and 7.2 average on a monthly basis per user, and these make $36.00 average transaction value and160.00 in Ghana cedis.

There has truly been remarkable growth in the access to financial services, by means of financial institutions and mobile money, yet the access has not grown equally across all segments of the population. Between all types of financial services, in Ghana there is gender gap in account ownership of 8% and an income gap in account ownership of 16%.

While these are still notable gaps, they are in line with developing country averages, and are lower in comparison to many other African countries.

While men are more likely than women to have accounts at financial service institutions, there is a significantly smaller gender gap between mobile money accounts across all of Africa. Also, as mobile money accounts require less documentation and have fewer possible associated costs, they are a cost effective mean to access financial services and is the preferred mean among those of lower economic status.

Dorothe Singer of the World Bank stated the primarily focus should still be on increasing the total percentage of the population with access to financial institutions prior to addressing specific gaps. She stated that gaps may decrease naturally over time, especially as technology continues to advance and become cheaper and more accessible, a primarily reason why mobile money has been so successful to begin with.

The rise in mobile money accounts has greatly changed how people make and receive payments. Payments for work, domestic remittances, and utility payments are increasingly being completed via mobile money. Approximately 40% of Ghanaians work in the agriculture sector and approximately 40% of them receive payments for their goods into financial accounts, almost exclusively mobile money accounts.

While it may be logically assumed that mobile money and banks may be at odds with one another, increases in mobile money accounts have been in unison with increases in financial institution accounts. In the 2014 - 2017 period, financial institution accounts in Ghana increased by 22%, from 35% to 42% of the population having accounts.

Overall, Ghana has been able to boast significant growth statistics in regards to its financial inclusion. Mobile money can greatly be attributed to progressing trend, as it has been able to access populations that face the most barriers to financial account ownership. While still more the population needs to be reached, Ghana growth rates continue to be progressive.

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