Accra, Ghana, June 15, 2018//-Bank of Ghana (BoG) has warned operators of financial technology (Fintech) companies to desist from lending money to individuals and institutions without its explicit authorisation.
According to the bank, some fintechs in the country are engaging in money lending and the provision of other financial solutions without permission from it.
The Head of Payment Systems at the Bank of Ghana, Dr. Settor Amediku who gave warning at Citi FM’s Fintech Summit held in Accra, as part of the ongoing Citi Business Festival.
It is only one fintech company which is licenced by the BoG to offer money lending and its related financial solutions to individuals and companies. However, some unlicenced fintech operators have joined the fray. This practice according to Dr Amediku is against the laws of the central bank.
“Currently, the Bank of Ghana doesn’t regulate the fintech industry. But the banks that the fintech companies are dealing with are being regulated by the BoG”, he stated.
To this end, Dr Amediku said: “We need to regulate the fintech industry. We therefore included provisions for regulation of fintech providers in the draft Payment Services and Systems Bill (PSSB). We are hoping that Parliament will pass it into law”.
The country’s financial services and payment landscape is already facing competitive pressure from fintech firms such as aggregators expressPay and Zeepay. Although they are not financial institutions, these firms offer competitive services in the payment sector including bill payment, airtime top-up, merchant payments, and peer to peer (P2P) transfers.
The BoG has seen the potential these fintech companies offer in terms of increasing innovative product offerings, lowering consumer pricing, and augmenting access for poor populations, and has thus included provisions for regulation of fintech providers in the draft PSSB which is currently waiting at Parliament to be passed into law.
Although the PSSB is yet to be passed, the BoG has started the conversation with these fintech entities, having requested that they pre-submit their applications for PSSB authorization, and providing no-objection letters for specific individual products.
The BoG sees fintech as having “a critically important role in accelerating financial inclusion” which currently stands at 58% as well as furthering women’s economic participation in the economy and growth of the economy in general, Dr Amediku noted.
This approach toward innovation also reflects the government’s general stance toward the adoption of digital payments.
Discussing the topic- the Future of Financial Ecosystem in Ghana at the summit which was attended by fintech operators, regulators and other stakeholders threw light on the prospects, challenges and the way forward of the fintech industry.
The Chief Executive Officer (CEO) of Ghana Interbank Payment and Settlement Systems (GhIIPSS), Archie Hesse, projected that the evolution of fintech industry would drive the financial system by 2020.
He added: “By 2020, fintech will drive the new business models, while digital will become mainstream”.
The CEO of Rancard Solutions, Kofi Dadzie used the occasion to warn that the fintech operators should be on alert in order not to be taken aback by disruptive technologies.
For the CEO of Hubtel, Alex Bram, the level of regulation will depend on the nature of transaction undertaken by fintech operators in the country.
Dr William Derban of Fidelity Bank urged fintechs to come out with products and services to address the challenges of the country. Looking at the few things that you have done, the fintech operators are capable to the task, he stated.
The Chief Technical Officer of PaySwitch, Emmanuel Osei Akoto, noted that the fintechs and banks should collaborate to deliver safe and secure digital financial services (DFS) to the people.
By Masahudu Ankiilu Kunateh, African Eye Report
