News Guide Africa

Tag: MOMO

  • Momentum builds up on digital credit as BoG set to open applications, early November

    Momentum builds up on digital credit as BoG set to open applications, early November

    As the Global Fintech market is projected to hit US$400 billion by 2028, stakeholders in Ghana’s digital economy space are building up momentum for full digital credit systems as they call for deeper collaboration between fintech firms and financial institutions to close existing gaps in Ghana’s financial sector.

    Bank of Ghana, has announced key regulatory measures aimed at strengthening innovation and aligning financial regulation with rapid market developments in the fintech space.

    Towards this, the central bank is expected to begin receiving applications for digital credit licenses starting November 3, encouraging interested players in the sector to take advantage of the opportunity.

    “The central bank will soon operationalise the Digital Credit Directive, roll out a virtual assets licensing regime, and expand financial literacy and consumer redress mechanisms nationwide”, Second Deputy Governor of the Bank of Ghana (BoG), Mrs. Matilda Asante-Asiedu said while speaking at the MoMo Fintech Stakeholder Forum, last week.

    The move, she noted, forms part of efforts to promote responsible innovation, enhance consumer protection, and build trust in Ghana’s growing digital financial ecosystem.

    She announced, “In the near term, what we intend to do is to operationalise the Digital Credit Directive and roll out our virtual assets licensing regime and expand financial literacy as well as the redress mechanism across the country.

    “We expect that from November 3, applications will now be received for Digital Credit. So, if that is an area you’re interested in, certainly that’s something to take note of.”

    Meanwhile, the Chief Products and Services Officer at Mobile Money Limited, Sylvia Otuo-Acheampong, has called for deeper collaboration between fintech firms and financial institutions to close existing gaps in Ghana’s financial sector.

    Also speaking at the MoMo Fintech Stakeholder Forum, Sylvia Otuo-Acheampong urged banks and other financial players to explore opportunities in digital credit and lending through fintech partnerships.

    “There are a lot of customers probably looking for an opportunity. I will appeal to our partners within the ecosystem, especially the financial institutions, to really look at credit in Fintech

    “I know they are traditionally looking within themselves,” she noted.

    She noted that while financial institutions traditionally focus on internal systems, greater openness to collaboration would expand access to financial services and innovation.

    Sylvia Otuo-Acheampong also encouraged fintech firms to strengthen partnerships and co-develop solutions that make credit collection more efficient.

    “Another appeal goes to Fintech, we co-create, we co-re-innovate, so I think we need to find very interesting ways to improve collection,” she urged.

     

    By Adnan Adams Mohammed

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

  • Locked up monies on deactivated MoMo accounts numbers to be retrieved for owners

    Adnan Adams Mohammed

     

    Relief to owners of SIM cards who have their numbers deactivated but had monies in their mobile money accounts are to receive their monies soon as Ministry of Communications and Digitalisation and Bank of Ghana complete the process to facilitate the retrieval of the locked up funds.

     

    Providing an update on the status of the SIM re-registration exercise in Parliament, last week, the Minister of Communication assured affected subscribers that, while they won’t be able to conduct mobile-related transactions with their deactivated SIMs, their funds will be recovered through the necessary processes.

    As part of a nationwide re-registration exercise of all SIM cards using the Ghana Card as the only source of identity in the country to help curb increasing cyber and mobile phone related crimes in the country, the National Communication Authority and the Telecommunication Companies deactivated a number of unregistered SIM cards. This resulted in a number of mobile phone users crying out as their monies were locked on the blocked numbers.

     

    “We continue to encourage the National Identification Authority (NIA) to assist people to acquire their Ghana Card. We have also been made aware of the difficulties facing subscribers in accessing their funds on their mobile money wallets”, Ursula Owusu-Ekuful sympathised with victims while speaking in parliament.

     

    “These subscribers will not be able to transact money mobile-related activities, however, we are working with the Bank of Ghana to ensure that these subscribers are able to retrieve funds upon the presentation of a valid ID and going through the required processes.”

     

     

  • Bank of Ghana to widen its scope on cryptocurrency

    Bank of Ghana to widen its scope on cryptocurrency

    The Bank of Ghana has assured stakeholders of its preparedness to sanitize the digital space with respect to cryptocurrency.

    The Central Bank admits that in the initial stages of the new digital currency, there was a gap, however, the regulator has braced itself to make it cleaner while building public interest.

    Speaking at the MTN MoMo Stakeholder forum under theme, ‘The impact of the Central Bank’s digital currency on future monetary policy and digital payments’, the Assistant Director in charge of Fintech and Innovation at the BoG, Clarence Blay, maintained that the digital position of his outfit is in consonance with global standards.

    Clarence Blay highlighted issues of the financial challenge confronting the banking sector in the past in relation to the digital space.

    He said, “We understand the philosophy that brought this thing into being, more of a libertarian philosophy following the 2008 and 2009 financial crisis. We have to work together to have a clean the system.”

    He further stated that “Based on our regular surveillance and global monitoring, we decided to explore central banks digital currency in deep.”

    The Bank of Ghana currently believes that the industry is moving towards the deeper financial space.

    However, in April, 2022, the Central bank issued cautionary directives to banks and other financial entities in its dealings in crypto currency trade and other unregulated investment schemes.

  • MoMo transactions records 3% decline in value

    MoMo transactions records 3% decline in value

    The value of mobile money transactions has seen a three percent decrease in a period of one month between March and April 2022.

    According to latest data from the Bank of Ghana, the value of transactions dropped from GHS90.5 billion in March to GHS87.7 billion in April.

    The number of MoMo transactions also dropped from 413 million in March to 403 million in April.

    The Central Bank’s Summary of Economic and Financial Data revealed a minimal decrease in the number of active mobile money accounts from 18.9 million to 18.6 million between March and April this year.

    Although it is observed that on a year-on-year basis, most of these transactions recorded an increase in value and volume between April last year and April this year, the figures decreased on a monthly basis.

    These reductions seem to be a result of reactions to the electronic transfer levy prior to its actual implementation on May 1, as experts had earlier predicted a reduction in the volumes if the tax policy is approved.

    This was indeed confirmed as Mobile Money agents across the country lamented a shortage of cash due to the rush from customers to withdraw their funds from their accounts ahead of the implementation of the levy.

    Amidst all this, Mobile Money Interoperability on the other hand has seen increases in both volume and value over the months.

    The Bank of Ghana data disclosed that the number of MoMo Interoperability transactions saw an 11 percent increase to record 14.2 million in April, while the value saw about 20 percent increase for the same month.

  • Exclude salary payments via MoMo from E-Levy – Telcos

    Exclude salary payments via MoMo from E-Levy – Telcos

    The Ghana Chamber of Telecommunications has called for a review of portions of the Electronic Transfer Levy (E-Levy) law to exclude the 1.5% charge on payment of salaries made via mobile money.

    According to the chamber, per the current law, salaries that are paid via mobile money would attract the 1.5% charge, whereas salaries paid through banks will not attract any E-levy. They described such move as discriminatory.

    The levy is a 1.5% tax on electronic transfers that include but not limited to, mobile money transfers done between accounts on the same network, mobile money transfers from an account on one network to a recipient on another network, transfers from bank accounts to mobile money accounts, and transfers from mobile money accounts to bank accounts. The charge will apply to electronic transfers that are more than GH¢100 on a daily basis.

    “Some of the challenges we have seen with the law, as has been passed, which we hope to take up, are a few discriminatory elements within what’s happening. For example, if your salary is paid from a bank account, it won’t attract the E-Levy, but if you are paid with mobile money, then it will attract the E-Levy. That definitely is not equitable and is discriminatory”, the Chief Executive Officer of the Chamber, Dr. Kenneth Ashigbey,said in an interview last week.

    “We hope that going forward, such issues will be addressed. We know that one of the elements of a good tax is that it should not be discriminatory, especially due to the channels that one uses. All of these are things we will be working on with government to ensure that the unintended consequences do not come and derail government’s own digitalization agenda that it’s put up,” he added.

  • Implementation of E-levy: List of transactions to be affected

    Implementation of E-levy: List of transactions to be affected

    As part of efforts to expand the country’s tax base, raise Ghana’s tax to GDP ratio and support government’s efforts at building an entrepreneurial country, government in the 2022 Budget, announced the introduction of the Electronic Transfer Levy (E-levy).

    The E-levy is a tax imposed on electronic transfers charged at the time of transfer.

    The levy, which was amended from 1.75 percent to 1.5 percent, will be a tax on electronic transactions, which includes mobile-money payments.

    The charge will apply to electronic transactions that are more than GH¢100 on a daily basis.

    Though the introduction of the Levy has received a lot of controversies, Parliament on March 29, 2022, passed the Electronic Transfer Levy Bill.

    Below are a number of electronic transactions that will be affected and those that will be exempted when the implementation kicks in later in May 2022.

    Transactions to be covered by E-Levy

    According to the Finance Ministry, E-Levy transactions will cover:

    Mobile money transfers between accounts on the same electronic money issuer (EMI),

    Mobile money transfers from an account on one EMI to a recipient on another EMI,

    Transfers from bank accounts to mobile money accounts,

    Transfer from mobile money accounts to bank accounts,

    Bank transfers on a digital platform which originate from a bank account belonging to an individual to another individual.

    Transactions to be exempted:

    The Ministry noted that the E-Levy will not apply to:

    Cumulative transfers of GHC100 per day made by the same person,

    Transfers between accounts owned by the same person

    Transfers for the payment of taxes, fees and charges on the Ghana.gov platform,

    Electronic clearing of cheques and Specified merchant payments (that is, payments to commercial establishments registered with the GRA for income tax and VAT purposes).

     ATM withdrawals are also excluded from the E-levy tax.

    The levy shall be administered by the Ghana Revenue Authority, GRA in accordance with the Revenue Administration Act 2016 (ACT 915).

    The levy shall be collected by the Ghana Revenue Authority, GRA through licensed Banks, Specialised Deposit-Taking Institutions, Payment Service Providers (PSPS), and Electronic Money Issuers (EMIS).

    After collection, the Commissioner-General of the Authority shall pay all amounts collected into the Consolidated Fund.

    According to the Ministry of Finance, Government is projecting to get about ¢6.9 billion from the tax on electronic transactions by the end of 2022.

  • Mobile Money Industry processes record $1 trillion in 2021

    Mobile Money Industry processes record $1 trillion in 2021

    The GSMA has today published its 10th annual ‘State of the Industry Report on Mobile Money’. It reveals that mobile money adoption and use saw continued growth in 2021, processing a record $1 trillion annually.

    The industry enjoyed a substantial increase in the number of registered accounts, up 18% since 2020 reaching 1.35 billion globally. The volume of person-to-person transactions were up to more than 1.5 million every hour.

    The report reveals that one of the most significant drivers of growth was merchant payments, which almost doubled year on year.

    It also highlights how mobile money continues to act as a core pillar of financial and economic inclusion, particularly for women.

    Mobile money diversified its value proposition beyond person-to-persontransfers and cash-in/cash-out transactions in 2021.

    It is now playing an important role in the daily lives of people and businesses, especially in low and middle-income countries (LMICs).

    The growth of ecosystem transactions such as merchant payments, international remittances, bill payments and bulk disbursements, together with interoperable transactions, are accounting for a more significant share of the global mobile money transaction mix.

    Merchant payments were instrumental in the growth of the mobile money industry in 2021. The value of merchant payments almost doubled, reaching an average of $5.5 billion in transactions per month.

    Providers are demonstrating that they can attract businesses to their platform with better incentives, such as efficient remote onboarding processes.

    For example, since Safaricom’s M-PESA began allowing companies to register for an account online in Kenya, more than 18% of new merchants are self-onboarding.

    “2021 was the year mobile money started to really diversify to B2B services. Beyond traditional person-to-person transactions, such as transferring money to family or friends, the industry is now central in helping small businesses operate more efficiently, and serve their customers better” said Max Cuvellier, Head of Mobile for Development, GSMA.

    Mobile money has also been a driving force for financial inclusion for the world’s most vulnerable, particularly women. Mobile money is empowering women to take more control over their finances and purchase goods that they urgently need.

    Additionally, 44% of providers responding to the GSMA Global Adoption Survey now offer credit, savings or insurance products, creating opportunities for underserved individuals to invest in their livelihoods and futures.

    With the gender gap in mobile money account ownership raging from 7% in Kenya to 71% in Pakistan – there remain some barriers to vulnerable people benefitting from mobile money.

    Owning a mobile phone is an obvious prerequisite to using mobile money, and women across LMIC’s are 7% less likely than men to own a mobile phone.

    Overall, 143 million fewer women own a mobile than men. Additional barriers to mobile money access include a lack of awareness of mobile money and a deficit in perceived relevance, knowledge and skills.

    While some progress has been made, the report makes clear that more must be done to address the mobile money gender gap across LMICs.

    Concerted action is required from policymakers, the private sector, donors and other stakeholders to learn from success stories, address the issue and ensure that existing gender inequalities are not further entrenched, especially in light of the COVID-19 pandemic.

    As highlighted in the report, in 2022, the number of people needing humanitarian assistance is predicted to soar to 274 million.

    Mobile money is expected to play an increasingly important role in both donations – where it makes delivery systems more efficient and transparent for humanitarian actors and donors – and the receipt of aid.

    The UN Refugee Agency sent $700 million in cash and value assistance (CVA) to 8.5 million recipients in 100 countries in 2020.

    They have set up digital payment programmes in 47 countries,15 of which use mobile money. In many humanitarian settings, the digitisation of CVA via mobile money has the potential to promote agency and dignity and foster financial inclusion.

    Mobile money also helps to enable access to basic utility services and agricultural solutions in LMICs. And to ensure this work continues, the mobile industry and humanitarian sector must keep working together to advance inclusive digital and financial inclusion even further for those who need it most.

  • Economists, MoMo vendors and users respond negatively to E-Levy passage

    Economists, MoMo vendors and users respond negatively to E-Levy passage

    Adnan Adams Mohammed

    Senior economists including a former finance minister, Mobile Money vendors and users have reacted negatively to the passage of the Electronic Transactions Levy bill into law by the current government.

    The bill was passed into law last week by one-sided parliament due to a walkout staged by minority NDC members of parliament and subsequently filing court action at the Supreme Court for stay of execution to challenge the ‘lack of quorum’ in the House at the time of passage of the bill into law.

    Mobile Money (MoMo) vendors across the country complained that, there were madrush withdrawals at their various mobile money vending outlets causing them to run out of cash which has tendency to collapse their petty business in the circumstances of the current economic hardship. However, it took the president, Nana Akufo Addo two working days to assent to the E-Levy law despite majority of Ghanaians haven openly kicked against the levy, especially taxing MoMo. An economics professor at the University of Ghana Business School shared his disappointment at the government for ignoring a better and progressive tax alternatives to push through the regressive E-Levy.

    “There are more efficient, progressive, fairer and equitable means of generating more tax revenue by improving efficiency along with existing tax handles. How much this e-levy can raise is far lower than what we could have gained if we had passed the exemption bill in 2019”, Prof. Godfred Bokpin intuited. “During the 2019 SONA, the President told us that the biggest threat to Ghana’s revenue base is an exemption and told us that in 2018 alone, Ghana lost GHS4.66 billion and assured us that the new bill is being sent to Parliament. After all these years, nothing has been done. But look at the urgency with which we want to pass the e-levy. When you do that, you’re creating some sort of imbalance that says that the economy is set up to favour foreign capital against domestic capital formation and that is unfortunate.”

    Also, Dr. Kwabena Duffuor, a former Finance Minister, reacted sadly to the news of the passage. He described the President Nana Akufo-Addo’s administration and the NPP MPs as not a ‘listening government’.

    Lamenting on his Facebook wall the morning after the e-levy was passed, Dr. Duffuor said, “The NPP has progressed in their passage of the unpopular e-levy bill. May it be on record that despite the hardship of the Ghanaian people and disaffection for the e-levy, the NPP ignored these concerns and added to our tax burden.”

    Just like many well-meaning and experienced economic specialists, Dr. Kwabena Duffuor has, in the past, offered several suggestions on alternatives to the E-levy.

    Dr. Duffuor, in an interview he granted on Starr FM in February this year, had said; “Currently in Ghana, foreign interests are largely the main beneficiaries of our extractive sector at the expense of Ghanaians who benefit from very little revenue from our natural resources”.

    “We must start looking at the sector we have ignored over the years – the extractive sector. A well-managed natural resources centre has emerged as the safest route to prosperity in many developed countries such as the USA, UK, and Germany. We must go back and renegotiate our mining agreements for higher revenues rather than stick to colonial agreements to the detriment of our people”.

    The levy rate was amended from 1.75 percent to 1.5 percent and will apply to electronic transactions that are more than GH¢100 daily.

    Critics of the proposal have warned that this new levy will negatively impact the Fintech space, as well as hurt low-income people and those outside the formal banking sector.

    The levy has been the source of tension in Parliament since it was introduced in the 2022 budget. The tensions culminated in a scuffle between lawmakers in Parliament in December 2021.

    The government has, however, argued the levy would widen the tax net and that could raise an extra GH¢6.9 billion in 2022.

    There are also concerns that the government may securitize proceeds from the e-levy to raise extra revenue.

  • MoMo transactions in value decrease by 8% within two months space of e-levy standoffs

    MoMo transactions in value decrease by 8% within two months space of e-levy standoffs

    Adnan Adams Mohammed

    The Bank of Ghana’s latest figures indicate that the value of mobile money (MOMO) transactions in January this year saw an eight percent decrease, from the GHS82.9 billion recorded in December 2021 to record GHS76.2 billion.

    Also, the number of MoMo transactions also saw a drop from 401 million in December to 372 in January this year. This comes at the time of heated controversy surrounding the introduction of Electronic Transactions Levy which will have every MOMO transactions exceeding GHC300 to be taxed 1.75%.

    Mobile Money Interoperability also saw a 15 percent drop in volume from 12.2 million in December to 10.3 million in January. But, on ear-on-year basis, the Central Bank’s Summary of Macroeconomic and Financial Data report the total number of MoMo transactions increased from 301 million in January last year to 372 million in January this year. MOMO transactions for the first month of this year have risen by 13.6 percent year-on-year to GHS76.2 billion.

    “These reductions seem to be a result of reactions to the proposed electronic transfer levy, as government communications had earlier confirmed a reduction in the volumes if the tax policy is approved”, the Central bank indicated.

    Meanwhile, the value of Mobile Money Interoperability transactions also saw a whooping jump of over 130 percent from GHS906 million to over GHS2.1 billion between January 2021 and January 2022. Although it is observed that on a year-on-year basis, most of these transactions recorded an increase in value and volume between January last year and January this year, the figures decreased on a monthly basis.

    Even Ghana Interbank Payment and Settlement Systems (GHIPPS) Instant Pay, which has constantly seen a rise in volume over the past months saw a 14 percent decrease from 5,375 to 4,620.

    Players in the industry have hence predicted more decreases in the volumes and value of electronic transactions should the government go ahead to implement the electronic transfer levy.