The country can deepen financial inclusion and propel economic development, amid the current economic struggles, by strategically positioning financial technology firms (fintechs) to leverage the latest technological advancements, president of the Ghana Fintech and Payments Association, Martin Kwame Awagah, has said.
Seen as a catalyst for social inclusion in the development process as it taps into the vast informal sector, Mr. Awagah said the fintech industry has potential to lead the country’s recovery efforts. “This can be done by leveraging digital technology to develop new products and services that meet the needs of consumers who are facing financial challenges in the country. Thus, a customer-centric but yet affordable digital product.”
Government under the National Financial Inclusion and Development Strategy in 2020, with collaboration from the World Bank, issued new policies aimed at increasing financial inclusion from 58 percent to 85 percent by 2023; thus creating economic opportunities and reducing poverty.
And to consolidate the gains made, Mr. Awagah further urged fintechs to collaborate with other players in the ecosystem; such as banks and regulators to create a more robust and inclusive financial system, as well as offer digital payment solutions that can help reduce the cost of transactions and increase access to financial services for underserved populations.
Additionally, he urged fintechs to prioritise ‘customer education and engagement’ so as to build trust and loyalty, adding: “By providing educational resources and support to customers, Fintechs can help them navigate the financial challenges they may be facing and build stronger relationships with their customer base”.
Dr. Kenneth Ashigbey, Chief Executive Officer of the Ghana Chamber of Telecommunications, also stressed the need for strategic partnership between fintechs and other players in the financial sector, saying: “The challenge we have in our country at the moment requires a lot of collaboration to really transform the nation.
“Fintech must be well-positioned to be able to support the country’s recovery effort. The need for fintechs is really a major one to support development of the informal sector and growth of the economy,” he said at the recently held 2022 Ghana Fintech Awards in Accra.
Over-regulation killing growth of fintechs
Meanwhile, progress in promoting financial inclusion and digitisation could be undermined by excessive regulation of the financial technology space, according to industry players.
While reasonable regulation is key to healthy competition, growth and development, players are of the view that too much of it can be counterproductive: stifling innovation and serving as a barrier for new entrants.
“Regulations are still tight, and I would call on regulators to soften the regulations and allow fintechs to grow. The only way we can get more fintechs, more financial companies and new ideas coming through, is to reduce the threshold for regulation,” Growth Africa Director for Taptap Send, Darryl Koku Mawutor Abraham, told B&FT at the beginning of this year.
Similarly, Country Manager of DPO Pay, Frank Awelle, lamented that extreme regulation, if not checked, could hinder the burgeoning fintech space.
“Our challenges really have to do with regulations, and that’s why we need the Ghana Fintech Association to come in and see how they can sanitise the space for us,” he said
He therefore urged regulators to soften requirements for fintechs to allow for greater innovations and competition.