Ghana´s Fintech Ecosystem and Regulation

In Ghana, the Fintech ecosystem has been growing in recent years. Among the reasons for this growth is the high internet penetration since almost all Ghanaian adults own a mobile phone, have basic numeracy and have the necessary ID to register for a formal account and most of them are also aware of mobile money services.

In Ghana, SMEs usually apply to micro-finance institutions, mainly because the application and approval processes are easier than with traditional banks. Most SMEs need loans to initiate business projects (capital expenditure), expand operations, invest in technology, employ more labor, increase productivity and improve competitiveness locally. In fact, lending is one of the most important Fintechs in Ghana, along with payments and equity funding.

Fintech regulation in Ghana

The main challenges for Fintechs in Ghana are the increasing fraudulent activities and cybercrimes and persistently high interest rates. Moreover, consumers have been victims of predatory practices as they seek high investment returns offered by MFIs; others have been using digital credit products without fully understanding their rights and obligations as consumers (Ministry of economy and industry, 2020). Also, Governance and financial issues feature prominently as barriers to investment or saving in Ghana, especially, corruption.

In Ghana, specific regulatory framework for crowdfunding providers just saw the light. On February 18, 2021, Bank of Ghana issued a policy to promote and guide the development and use of crowdfunding products and services for the banking sector. Models of crowdfunding currently permitted under Bank of Ghana’s policy are donation-based and reward-based crowdfunding. These models entail the collection, holding and disbursement of funds, and are available to banks, Specialised Deposit-Taking Institutions (SDIs), Dedicated Electronic Money Issuers (DEMIs) and Enhanced Payment Service Providers (EPSPs).

There are other variants of crowdfunding such as Debt (or Peer-to-Peer lending) and Equity models which deal with securities and loans and leverage payment platforms for the collection and disbursement of funds. By their nature, they fall within both the regulatory jurisdiction of the Bank of Ghana and the Securities and Exchange Commission (SEC). To this end, the Bank of Ghana will collaborate with the SEC to prevent possible regulatory arbitrage and to strengthen the stability of the financial system.

NFBC in Ghana

Ghana’s financial services industry can be categorized into three main sectors: Banking and Finance (including Non-Bank Financial Services and Forex Bureaux); Insurance; and Financial market/capital markets (The Fintech Times, 2021). Also, the banking sector is comprised of fourteen foreign-controlled and ten domestically-controlled universal banks.

One of the top NFBC is Boston Premier which invests in people by providing credit, through loans, to cooperatives and development organizations dedicated to serving the poor. Basically, they are focused on providing small loans, or microcredit, as the primary service to clients.

Lending Fintech

Among some of the Ghana lending Fintech to watch in 2021 are: 

• Kwidex:  Online crowdfunding platform for agribusinesses. It provides a platform connecting investors with Ghanaian farmers. It allows investors to fund farming businesses; mushroom production businesses etc. through their platform and provide a profit share to the investors at the end of the farming season.
• Nvoicia : Nvoicia helps small businesses get access to cash to keep their businesses running through the use of unpaid invoices. Nvoicia has been able to process over 2,086,458.71 invoices worth millions of Ghanaian shillings and works along with 4 other industries.