Adnan Adams Mohammed
As the Mobile Money services being operated by the telecommunication companies in the country records giant strides in transaction and values, an economist is worried with the overlap of mandated services.
He questioned how telecommunications companies are taking over banking services in the country. In his view, telcos paying interest on the accounts of mobile money subscribers and offering them loans among other financial services, must be checked.
According to the University of Professional Studies, Accra (UPSA) lecturer, telcos have no such mandate to pay interest and offer loans to customers as the traditional banks and questioned why the Bank of Ghana (BoG) is mute on the activities of the telcos in the financial sector of the economy.
“The telcos are fast-deviating from their core mandate of communications service providers,” Dr Kofi Osei Adu noted and described the development as worrying in the financial sector of the economy that telcos are now playing the roles of traditional banks.
Dr Adu attributed that, it is because the BoG has relaxed the rules of engagement, it has given the telcos the impetus to drift off their mandate.
He noted that some of the telcos are reneging on their mandate and focusing more on the mobile money sector.
Mobile money (MoMo) has witnessed significant increase in adoption since its inception into the Ghanaian financial market in 2009. Available statistics by the Bank of Ghana show that between 2012 and 2017, the number of registered MoMo customers increased by 534%, and active MoMo customers increased by 3,119%.
With this performance, it is expected that MoMo will drive financial inclusion by not only providing users with a service to make money transfers but graduating them to use other forms of formal financial services such as savings, credit and insurance.
However, little evidence currently exists on the relationship between MoMo adoption and the use of formal financial services nor on the role of Central Bank regulation in facilitating MoMo deployment and adoption. For financial inclusion purposes, it is also imperative to understand the factors driving or inhibiting MoMo adoption among groups who are mostly financially excluded.
Mobile money is a technology that enables financial transactions through mobile phones without a bank account. It is driving financial inclusion, especially in developing countries. It gives more people a chance to use financial products and services.
In Ghana, there is a policy to encourage the use of mobile money and reduce the flow of cash. And mobile money has proved popular because of its advantages. People can transfer money or make payments wherever they are, in a simple, fast, convenient and affordable way. Mobile money has improved the efficiency of transactions and initiated some changes in traditional banking in the country. By 2017, Ghana had over 11 million active mobile money accounts.