An estimated 2 billion people or 38% of adults lack access to a transaction account (Global Findex 2014) and are excluded from the formal financial system.
In response, the World Bank Group (WBG) with private and public sector partners set an ambitious target to achieve Universal Financial Access (UFA) by 2020.
The UFA goal is that by 2020, adults globally have access to a transaction account or electronic instrument to store money, send and receive payments.
Financial access is the first step toward broader financial inclusion, where individuals and firms can safely use of a range of appropriate financial services, including savings, payments, credit and insurance. (source –http://ufa.worldbank.org/)
In the case of Ghana, it is estimated that about 40% of the bankable Ghanaians do not have access to banking services in Ghana.
These are attributable to a number of reasons including the concentration of Commercial Banks in the big cities, the cumbersome nature of banking processes, the intimidating nature of some banking halls, long lists of account opening requirements and the high costs involved.
As a result, a number of Ghanaians continue to keep their monies under their proverbial mattresses and in some cases, give them to fraudulent microfinance companies with it associated problems.
Commercial Banks over the years have been encouraged to come out with more creative ways in bringing these unbanked population into the mainstream banking but to no avail.
Some banks are however, making the effort in that direction but due to the cost involve, most of these banks have shunned the idea of broader financial inclusion.
Some banks even believe that it is too expensive to embark on large individual retail banking as they are much interested in short term gains and the fact that it affects their service delivery due to the long queues in their banking halls.
For Banks to undertake broader financial inclusion they will have to incur additional cost of building or renting new premises or set up small agencies and also employ staff to manage such offices and the government can help the banks to achieve this goal through tax rebate and other incentives.
As a result, most of the big banks in Ghana rather concentrate on the few corporate and commercial customers for their short term profits leaving the larger population unbanked.
It is however important to note that a lot of efforts have also been made by some banks to include a lot of people into the main banking system.
These include the use of Merchant Systems where approvals are given to vendors to open account for such banks and also provide other approved services to their customers.
Others have also introduced mobile vans to provide banking services to their customers.
Furthermore, opening of agencies and small branches in small cities are all means to bring banking services to the doorsteps of the people as done by some banks.
Despites all these efforts, large numbers of the bankable Ghanaians have not been able to join the main banking stream.
This means that these methods have not been effective to encourage more Ghanaians to join the main banking stream.
The situation has also been worsened by the current debacle in the microfinance sector.
With the advent of mobile money services, Ghanaians now have options to either keep monies in banks or deposits their monies on their mobile wallets.
Today, mobile money services continue to thrive and are affording the opportunity for large number of Ghanaians to save, make transfers and very soon also earn interest on the monies in their wallets.
Money transfers to the hinterlands and other parts of the country have become easy though still expensive.
People prefer to keep some monies on their mobile money wallet for easy access than the banks and I believe these mobile money companies are actually doing something right.
Ghanaians have come to accept mobile money services especially for their money transfers because of its convenience and flexibility.
This has resulted in increase in transactions on this platform over the years. For instance, Mobile money transactions increased from about 550 million cedis in 2015, to over 600 million cedis in June 2016 and the growth in transactions since 2009 when MTN started it has been impressive and it behoves on the Bank of Ghana to harness it potentials for the kind of Financial Inclusion we have been calling for over the years and also in line with the Universal Financial Access – UFA goal of 2020. BOG as a regulator must put in place right policies to sustain the growth and the confidence of Ghanaians in the services.
It is also important that BOG also take a second look at the flexibility with which customers could subscribe to the services as compared to account opening requirements for the banks and the fact that the charges for the service are still high for the poor.