Leveraging the growth in Financial Inclusion to boost Household Investments (Part 2)
Digital connectivity is key, but it is only a starting point for successful digital development. Likewise, achieving universal financial access is important, but to maximize the benefits from financial inclusion, we need to look beyond account access. Ghanaians have so far used mobile wallets principally for transferring money to a person (peer-to-peer, P2P) leaving a lot more room to be explored and harnessed. Some issues to be considered are as follows;
Outdated or inappropriate regulatory requirements often create barriers to utilizing the Mobile Money platform beyond its current core function. For example, satisfying stringent Know-Your-Customer (KYC) requirements, which are tailored to meet specifications spelt out by regulators.
Secondly, the expansion of digital finance and the participation of specialized new players also creates new risks that need to be identified, managed, and mitigated. Traditional financial regulation is often not designed to deal with these innovations. Yet, customers need to be protected from risks such as fraud and mis-selling, especially those who have little experience with the regulated financial sector.
In the light of the above topic, it was heart-warming when for the first time in 2016, Mobile Money users earned interest on their digital saving accounts, with total interest paid to holders of electronic money wallets amounting to 24.8 million GHS ($4.5 million) in the first year alone.
A financial inclusion led growth in savings and investment is paramount in the quest to reduce poverty and improve levels of social and economic development across the country. This is undoubtedly a huge mine field yet to be tapped.