A new survey conducted by the Ministry of Finance in partnership with some financial services regulators in the country has found that there is a dramatic shift to Mobile Money as the most used remittance channel in Ghana.
The survey highlighted that Mobile Money remains a critical driver of Ghana’s financial inclusion drive as 52% of respondents indicated that they have received money via mobile money during the survey period.
Additionally, 47% of respondents indicated that they have sent money through the MoMo platform while 2% and 1% of respondents indicated that they have sent money through Friends/family members and Money Transfer Agencies, respectively.
The survey categorized the destination of remittances into local and international. The findings revealed that 48% of the respondents sent money within the shores of the country during the survey period. On the other hand, only 1% of respondents noted that they sent money outside Ghana.
In terms of remittances receipts, the study revealed that 57% of respondents received money within Ghana while the remaining 43% did not. Adults are more net receivers than senders, mostly local remittances.
International remittances account for 5% of all received remittances. The 5% of inflowing international remittances were received from: USA (43%), UK (21%), Italy (13%), and Germany (11%).
It is interesting to note that adults in urban and rural areas have adopted Mobile Money as a means to remit and women were found to largely benefit as they are net receivers of remittances.
Remittances by type and locality
By locality type, 36% of rural dwellers indicated that they were not remitting, while 64% were remitting. Among those remitting, 60% remitted through other formal channels (non-bank), 3% through Family/friends and 1% through Informal channels.
In urban areas, 71% remitted through non-bank formal channels, Family/friends (3%), Informal channels (1%) while the remaining 25% did not remit during the survey period.
By livelihoods, the study found that those formally employed by government remitted the most (86%), while 12% of remittance dependents utilize informal channels or family and friends.
For the Informally employed, 77% remitted through non-bank formal channels, 2% through family or friends while 21 indicated that they were not remitting.
Public Sector policy implications
The survey revealed that about 40% of the adult population are self-employed or own small businesses. As such the Ministry of finance indicated that “Supporting this sector with financial services and access to finance may, therefore, spur economic growth”.
Understanding the small business sector, according to the Finance Ministry, will require a full scoping study that looks deeply at their challenges, and at how Covid-19 has impacted this sector and more importantly, understanding how to support it.
The Ministry further recommended the need to develop a National Financial Education Strategy to support the rollout and complement the dawn of technology in fast-tracking financial inclusion.
“To reduce the potential digital divide, financial literacy is a requirement for meaningful usage of financial services. Integrate financial education in the school curriculum from the basic level, Lower Primary to Junior Secondary School.”
Ministry of Finance
The 2021 Demand Side Survey was to measure the levels of financial inclusion, identify the drivers and barriers to the usage of financial products and services in the country. It aimed at highlighting some opportunities that are yet to be tapped in the economy to increase the country’s financial inclusion.
Speaking at the launch of the Ghana Financial Services Demand Side Survey, Lead Consultant of the project, Robert Berkowtz of Finmark Trust, disclosed that Mobile Money followed by health insurance is critical in the government’s quest to increase financial inclusion.
“Financial inclusion has seen a significant improvement in the last 10 years and there has been a phenomenal growth in the provision of financial products. We also realized that many more people are getting access to some form of funds which they were not able to get some years ago. Mobile Money is a key driver in the financial inclusion journey and we must make it a point to develop products and services to attract more users.”
Robert Berkowtz
Commenting on the report, Deputy Minister of Finance, John Kumah, assured that government is committed to using all digital means available to increase financial inclusion to the 85% national target by 2023.
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