Frank Adu Jnr, Managing Director of CAL Bank, has called for policy direction in the mobile money sector.
According to him, the situation whereby the mobile money sector has been allowed to develop and grow without any policy direction does not auger well for stakeholders and would soon create problems just like what happened in the micro-finance sector.
Mr. Adu Jnr, who was speaking to journalists after the bank’s ‘Facts Behind the Figures’ at the Ghana Stock Exchange in Accra recently, said that “financial inclusion is good and we must all go for it but what I am saying is that it must be controlled; it must be within a policy framework.”
He said many things have been left to develop without control and “I don’t think this one should be allowed to happen that way. That is why I am calling for policy direction.”
Mr Adu Junior gave an example of a mobile money company advertising a loan product and charging 20 percent commission on the amount that is borrowed for a month.
According to him, such a practice must not be permitted, explaining that “in financial terms, the 20 percent that is being charged is a 240 percent interest rate per annum on the borrowing. And that should not be allowed to happen.”
“We cannot sit there for that to happen…the same way we sat there and let the micro-finance companies evolve without restrictions,” he said.
The MD called on the authorities to be up and doing before mobile money customers begin to experience the exact problem that micro-finance customers faced recently.
Mobile Money Penetration
The penetration of mobile money in the country has seen an astronomical rise for the fourth year running, with last year’s value of transaction reaching GH¢35.4 billion, according to recent data gathered.
The GH¢35.4 billion transaction value is an increment of more than 216 percent over the previous year.
In 2014, the three telecom operators- Airtel, Tigo and MTN- engaged in mobile money were able to do transactions worth about GH¢11.2 billion across the country.
The value of mobile money transactions when put into perspective is just GH¢5.85 billion shy of the total deposit liabilities of the 29 banks as at the end of last year, a figure that is likely to be surpassed by the mobile operators by the end of this year, he indicated.
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