Up their financial inclusion drive – Bawumia to Banks

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Vice President Dr Mahamudu Bawumia has encouraged financial institutions to up their financial inclusion drive – reach out and capture the unbanked into the mainstream.

There needed to be a paradigm shift and increasing use of technology to rope in the unbanked segment of the population.
That, he said, was critical to the acceleration of the government’s economic transformation agenda.
“We really need a paradigm shift in Ghana in the area of financial inclusion because what is clear is that we have many financial institutions but we still have a very large segment of our population unbanked,” he said.
Vice President Bawumia was speaking at the launch of the 10th anniversary of BOND Savings and Loans PLC in Accra.
BOND, an indigenous financial services provider was licensed by the Bank of Ghana, 10 years ago as Savings and Loans Company.
The company has moved from one office to 12 outlets within the country, with a customer base of over 10,000.
“When you look at the history of financial sector development in the more advanced countries it is very clear that financial inclusion was very critical in many countries – mobilised savings and therefore lower interest rates.”
“If you go back, whether you are looking at the 18th century’s Friendly Society Acts in Europe or others, this was a key matter and for us as a country, we have largely seen a lot of financial institutions but the depth in terms of coverage is not there.
This is why we really need this paradigm shift and the paradigm shift is going to come in terms of mindset but also to use technology that allows us to reach the unbanked in the population.”
Vice President Bawumia applauded the role played by Financial Technology (Fintech) companies in the government’s digitisation agenda.
He said that represented a significant shift in the philosophy guiding national development, which had resulted in the implementation of a number of innovations – paperless port system, digital property address system, national identification programme and the recently launched mobile money interoperability payment system, as well as the upcoming digitisation of land records.
While commending the board, staff and management of Bond Savings and Loans for the achievements chalked over the last 10 years of existence, He challenged them to continue with their mission to expand the reach of financial services through technology to help include the financially excluded as well as bring a larger part of the population into the formal s
Vice President revealed that an offline version of the digital property address system called Ghana Post GPS will soon be released “so that when you are at places where there is no internet service, you can still access the addresses of people and be able to find places and locations.”
He described the digitisation of addresses as critical in the promotion of financial inclusion in the country.
The current nature of the address system in Ghana makes it difficult for financial institutions to extend adequate services to customers since finding where people live is difficult, a problem which has partly accounted for high loan default.
The system is location-based and provides an effective means of addressing every location and place in the country, including undeveloped parcels of land, using an information technology application (app).
The app generates a unique code for every property or location in Ghana, using the Global Positioning System (GPS) technology.
A national address registry is imbedded into the system to enable individuals to validate their home and business addresses for easy direction and identification purposes.
The Vice President was hopeful that efforts and government initiatives outlined to formalise the economy and achieve the agenda of roping in more people into the financial system would soon produce the desire results.
He hoped that in a year’s time the National Identification Authority would have completed its work and “Ghana will for the first time have a unique ID for everybody.”
We have many financial institutions but we still have a very large segment of population unbanked.
He bemoaned the lack of depth in terms of the coverage of the masses, justifying government’s resolve and ongoing efforts to formalise the Ghanaian economy.
Veep praises BOND for sterling performance
BOND’S Capital Adequacy Ratio (16 per cent) is double that of the industry average while its Nonperforming loans ratio is below 10 per cent.
These and other achievements got the Dr Bawumia congratulating the company and describing it as “an enviable brand.”
He praised its management and staff for the hard work and called for further efforts to help deepen government’s avowed financial inclusion agenda.
Describing managers of BOND as “consummate professionals,” the Vice President observed “even in the banking industry we are seeing over 23 per cent of loans which are non-performing; but you look at Bond and it’s under 10 per cent; we wish all companies were like BOND.”
He was impressed that BOND had become one of the financial institutions that had made it a mission to expand the reach of financial services to help include the financially excluded as well as bring a larger part of the population into the formal sector.
The innovations are meant to introduce efficiency into the economy and transform it from the largely informal stage to a more formal one.
Financial inclusion and the formalization of the economy is one of the visions dear to the heart of government. We have been pursuing the agenda of greater financial inclusion and formalisation of the economy in many spheres.
Govt to support institutions that promote financial inclusion
He pointed out that banks and specialized deposit-taking institutions play a critical role in the development of the economy.
Government, he pledged will give the needed support to enable the sector perform its critical role of mobilizing savings and channeling the funds to other households, micro and small and medium scale enterprises who need the funds to expand their businesses and create jobs.
Land digitisation team makes progress
According to the Vice President, a lot of progress was being made in ensuring the digitisation of the land registration in the country.
Graduates from the Nations Builders Corp, he said will be drafted to assist in digitizing all out land records.
In the financial services industry, a lot of lending is done on back of property-the mortgage system. But in Ghana the mortgage system is far from developed. There is a problem with titling of lands.
As obtains in Uganda or Pakistan, one can get onto the internet, with the coordinates of the particular land and find out who owns it.

Source: Isaac Aidoo || The Finder

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