Former Finance Minister, Dr. Kwabena Duffour has urged the banking and insurance industry to leverage on the rise of Mobile Money services (MMS) to expand and provide financial inclusion for the informal sector.
He said the current penetration of MMS in the financial sector provided a fine opportunity for banks and insurance companies to reach non-banking and uninsured people by re-aligning their operations, systems and strategies to serve such wide range of individuals.
“With technology and the customer base, Mobile Network Operators (MNOs) are reaching sectors that the traditional financial institutions have failed to service in the past. It is therefore expected that banks and insurance companies would align their operations to better position themselves to win in this situation,” he said.
Dr. Duffour made this remark when he addressed participants of the 38th Management Day celebration held in Accra yesterday on the theme, ‘Finance and insurance for inclusive national development’.
The day was instituted by the University of Ghana Business School (UGBS) in 1970 by the school’s third Director, Prof. J.L Retting with the objective of bridging and fostering a harmonious relationship between industry and academia.
It is marked annually to bring together experts in academia and industry to discuss ways of strategising to harness the content and delivery of business education.
Citing Kenya and India as an example, Dr. Duffour said both countries were doing a lot to align MMS to insurance and banking products including providing various financial services through the MMS to rural parts of both countries.
According to Dr. Duffour, rural folks in the country could also be covered through the MMS when local banks and insurance took steps to expand and tailor their services and products to serve their needs through MMS.
Making a reference to a Bank of Ghana payment statistics report, he said between 2012 and 2016, registered subscribers of mobile money increased from 3.8 million to 19.7 million.
“Within the same period, the number of transactions also increased substantially from 18 million to 550 million, while the value of transactions soared from GH¢ 594 million to GH¢ 78.5 billion. By the end of 2016, the mobile money balance on float and in the banking system stood at GH¢1.257 billion,” he said.
Dr. Duffour said the available statistics showed that MMS has been accepted widely by the citizenry and was poised for tremendous growth.
The Managing Director of Cal Bank, Dr. Frank Adu Jnr, said the growth of MMS posed a huge challenge to the banking industry to develop and align their operations with its services.
He warned that if the industry did not embark on the re-alignment soon, most banks would shrink in size and tumble because their services would be taken over by the MNOs.
The Vice Chancellor of UG, Prof. Ebenezer Oduro-Owusu commended the business school for sustaining the day and urged it to explore other avenues to increase its contributions to the growth of the financial sector.
By Charles Amankwa