ghananlpcommunity/ghana-gov-speeches-sentences huggingface dataset:
To a large extent, these supportive policies, together with stringent supervision and regulation, ensured that the banking sector remained s ound and well-capitalised with strong growth in total assets, investments and deposits, despite the challenging pandemic environment.
In the first ten months of the year, total assets increased by 16.1 percent year -on-year to GH¢173.8 billion .
Total deposits grew by 17.2 percent on an annual basis to GH¢117.4 billion , supported by strong liquidity flows, while the gradual improvement in gross advances has continued, with 8.9 percent growth at end- October 2021 compared with 5.2 percent at end-June.
The industry’s Capital Adequacy Ratio of 19.8 percent as at end-October 2021 was well above the current regulatory minimum threshold of 9 11.5 percent.
Profitability in the industry was s trong, with a 21.8 percent annual growth in profit before tax to GH¢6.0 billion at the end of October 2021.
Ladies and Gentlemen, the macroprudential policy measures and regulatory reliefs implemented at the onset of the pandemic remain in place to support a more robust recovery of the economy.
However, the expected boost to private sector credit growth has been sluggish, amid relatively sticky lending rates in the banking sector.
The recently published Annual Percentage Rates (APRs) , which reveal actual lending rates in the banking sector, indicate that average base rate charged small and medium enterprises on a 1- year loan ranged between 19.5 percent and 30.4 percent at the end of September 2021.
On all counts, t hese rates are very high and have proven inimical to private sector credit expansion that was expected from the regulatory reliefs, even considering the lingering uncertainties surrounding the pandemic .
Annual growth in private sector credit was 10.1 percent in October 2021 compared with 13.4 percent in October 2020 .
In real terms, pr ivate s ector credit contracted by 0.8 percent compared with 3.0 percent growth over 10 the same comparative periods.
As regulators, we expect that as the growth momentum gains traction, supported by COVID-19 vaccination efforts, private sector credit will rebound.
Broadly, the banking sector outlook remains positive.
Results from the November 2021 stress tests show a banking sector that remains resilient to mild and moderate credit risk and liquidity stress conditions.
The potential effects of a prolonged pandemic on the banking sector, particularly on asset quality, however, needs to be monitored carefully to inform policy measures.
The Committee decided that macroprudential policy measures and regulatory reliefs announced at the onset of the pandemic should remain in place to support a more robust recovery of the economy.
Now, Ladies and Gentlemen, to the topic of the day, that is, the strategic role of banks in the Ghana’s emerging digital economy… 16.
Globally, a new economy is emerging , built on digital technology.
From agriculture, through industry , to commerce, to name just a few , no sector has been spared the transformation al 11 power of technology.
Advanced communication technologies have linked businesses and consumers across national boundaries, breaking down the physical barriers to human interactions.
This new wave of change has been described in some circles as the fourth industrial revolution, characterised by the diffusion of knowledge and transfer of technology.
In Ghana, the trends are not different.
The high mobile phone penetration rate , that is the ratio of mobile subscribers to total population, has improved nationwide connectivity and resolved the challenges of distance and unfriendly terrain.
The a vailability of internet, and the flexibility and customer convenience has facilitated a vibrant online local community , which has supported electronic transactions and prompted a major shift towards e -commerce.
Currently, businesses in various sectors of the economy - including restaurants, supermarkets, pharmac ies, airlines and hotels - are doing a lot of online transactions.
Also, the predominantly youthful population with strong affinity towards and dexterity with digital devices is providing an added push to wards Ghana’s digi tisation agenda.
12 18.
Distinguished Ladies and Gentlemen, the COVID-19 pandemic was challenging, but it also presented some opportunities.
As you will recall, following the restrictive measures imposed to contain the spread of the virus, the Bank, in collaboration with industry stakeholders, embarked on measures that encouraged the use of electronic payments.
So far, the data s uggests that use of the various electronic payment channels of banks and payment service providers recorded phenomenal increase within that period.
Customers of digital payment channels actively used their accounts, while dormant accounts were activated an d new customers were on-boarded.
This shows that the pandemic injected some vigour into the digital payments space and pulled households and firms into the financial technology space.
Currently, there are more than nineteen million (19,000,000) active mobile money accounts driving the digital financial services industry.
Prior to the pandemic, this number was 14.4 million.
Similarly, mobile money interoperability continued to show strong growth of about 365 percent in transaction volumes and 651 percent 13 in transaction values between 2019 and 2020.
These trends point to increased consumer confidence and preference for digital payment options in the economy .
Collectively, therefore, we , as stakeholders, must leverage on these positive headwinds to develop and implement digital strategies to spur growth in the digital financial services sector.
Ladies and Gentlemen, a key feature of a digital economy is the aggregation of digital platforms that facilitate economic and social activities.
Mostly these platforms require integration with the financial service s sector to achieve the convenience, speed and efficiency desired by users.
Here I must commend banks, specialised deposit-taking intuitions, and FinTech partners for the innovative solutions currently driving the emerging digital financial service industry in the country.
The v arious financial services accessible through social media platforms , including Whats app, clearly demonstrate your swiftness to adapt to the dynamic technological changes.
I dare say, however, that we have barely scratched the surface of financial services digitization because most people still do not have access to such services.
Cash transactions still dominate the retail payments space despite the availability of various digital financial products and services.
The increasing use of smartphones is leading to complex digital financial products and services with the likelihood of exclusion for ordinary persons.
And, the challenge is how to carry along every eligible person and business into the fold of financial digitization without stagnating innovation.
Over the past twenty (20) odd years, the Bank of Ghana has provided leadership in the digitali zation of the Ghanaian financial services industry.
Starting from 1998 to date, three (3) sequential strategy documents have directed the development of digital financial services, with the extant one being the third and scheduled to run its full course by the end of 2024.
Besides the solid interbank payment system infrastructure, the regulatory environment has also evolved and provided a strong legal foundation for dynamism in the payment ecosystem with customer needs at the focal point.
15 23.
Starting with the Payment System Act, 2003 (Act 662), the legal basis was established for digitalization of interbank payments with implementation of the real time gross settlement system (RTGS).
Th e RTGS platform improved interbank liquidity management, and significantly reduced credit and settlement risks.
These achievements set the stage for the development of a dependable digital financial services based on the timely execution of funds transfers and the certainty of funds arising from the twin attributes of irrevocability and settlement finality.
Act 662 also made possible a variety of interbank retail electronic payment systems , such as electronic cheque clearing, direct debit and credit transfer under the automated clearing house platform, and instant payment system , thereby diffusing the benefits of digitalisation to bank customers.
Similarly, the 2008 Branchless Banking Guideline and the 2015 Electronic Money Issuer and Agent Guidelines issued pursuant to Act 662 further expanded digital financial services to the un banked and underserved in the form of mobile money and sped up the financial inclusion drive 16 beyond bank branches, rural and community banks, and other ‘brick and mortar’ outlets of financial institutions.
To boost merchant wallet transactions, the Bank issued a three (3) -tier KYC merchant account framework to cater for the digital merchant account on -boarding needs of businesses of different sizes and financial strength.
Similarly, the Ghana Interbank Payment and Settlement Systems (GhIPSS), working with industry stakeholders, deployed a universal QR code, called the GhQR code, to promote affordable acquisition of merchants for acceptance of digital payments.
A consumer -centric interchange fee is being developed by GhIPSS in conjunction with banks, mobile money operators, and payment service providers that will incentivise service providers and allow mobile money account holders to make fee-free interoperable payments at merchant points of sale.
About five years ago, Bank of Ghana observed th e transition of technology companies from giving passive back office support to banks and specialised deposit taking institutions to taking active roles in financial service delivery.
The collaboration of banks with 17 financial technology companies has resulted in the de ployment of innovative digital financial products , expanded access to financial services, and furthering of Bank of Ghana’s cash -lite and financial inclusion programme.
The universal banks and F inTechs collaborative business models were deemed the perfect fit to enhance financial deepening and t o support the process of a digital Ghanaian economy .
Therefore, the Bank worked with stakeholders to strengthen the regulatory regime with the enactment of the Payment Systems and Services Act, 201 9 (Act 987) to create a conducive regulatory environment for digital financial services.
Act 987 has subsequently fostered a strong strategic alliance among banks and FinTechs in the delivery of digital f inancial products and services for different segments of the market.
Other supportive pieces of legislat ion relevant to the digital economy have been enacted and include the Electronic Transactions Act, 2008 (Act 772), Data Protection Act, 2012 (Act 843), Cyber Security Act, 2020 Act 1038) and Anti-Money Laundering Act, 2020 18 (Act 1044), all intended to build consumer confidence in the national digital transformation agenda.
With the successful rollout of the national biometric identification card, implementation of the flagship Ghana.Gov payment platform and the establishment of the National Cyber Security Authority, a robust foundation has been laid for a responsible, trustworthy and sustainable digital economy.
To forestall such activities from becoming embedded and weakening the digitization drive, the Bank has established a Financial Industry Command Security Operations Centre (FICSOC).
The Bank has also adopted an integrated Risk -based Supervisory Approach for digital financial services to focus on fu nctional areas of operation and systemic risks.
This includes a holistic review process involving prudential, market conduct, financial integrity, and payment systems risk perspectives for products, services, and technology 19 outsourcing arrangements propose d by banks and non -banks or FinTechs.
These tighter regulatory frameworks will ensure the integrity of the digital financial services ecosystem, improve consumer confidence, strengthen the widening acceptance of digital financial services, and scale up financial inclusion.
The financial technology industry is rapidly expanding and banks will have to innovate to keep abreast and remain relevant in the digital space.
To support banks in this endeavour, the Bank of Ghana has established a regulatory and innovation sandbox to live- test digital financial service innovations in a controlled environment before approval and implementation .
I urge all banks to take advantage of this opportunity or to establish similar innovation centres to support and sustain the drive t owards t he digital economy.
Ladies and Gentlemen, there is no doubt that the private sector has spearheaded the recent surge in i nnovative financial digital solutions, supported by the enabling environment provided by Bank of Ghana.
However, there is a limit to which private sector 20 resources can be used to address the constraints to financial inclusion.
For the digital economy to be truly inclusive, every eligible person must have access to some form of digital payment instrument, just like the physical currency.
It therefore behoves the Bank to guarantee universal access to digital payment instruments, and one sure way to do that is through the issuance of Central Bank Digital Currency (CBDC).
The Bank has already taken the first steps to pilot the CBDC concept.
When finalised, this single project is expected to usher Ghana into a digital economy .
So far, the pilot CBDC project, which commenced in September 2021 in partnership with G+D, is progressing steadily and , as major stakeholders, all banks will be engaged in the process.
We are confident that you will lend your full support to this project for a successful implementation.
In closing, Ladies and Gentlemen, let me reiterate that efficient, convenient, and safe digital financial service s are central to the digital economy and for ensuring a financially inclusive society.
A sustainable digital banking environment should be people- centred, therefore banks’ resources and efforts should be guided by 21 inclusive strateg ies that promote the integrity of the payments ecosystem to build confidence in users.
These initiatives, in addition to lessons provided by COVID -19 pandemic , should provide the needed stimulus for developing a robust, resilient and inclusive digital financial service industry supportive of a digit ised Ghanaian economy.
On this note, Distinguished Ladies and Gentlemen, let me wish you compliments of the season and a Happy and Prosperous New Year in advance.
Thank You for your attention.
1 Second Anniversary Celebration of the Association of Ghana Industries’ Women in Business Initiative on the Theme, “Women-Led Businesses: Exploring Finance Channels and Market Access for Growth” Key Note Address Delivered by Mrs.
Elsie Addo Awadzi, Second Deputy Governor, Bank of Ghana 9th December 2021 2 Her Excellency Madam Kati Csaba, Canadian High Commissioner to Ghana Madam Grace Amey Obeng, Chairperson, Association of Ghana Industries ’ Women in Business Initiative Dr.
Humphrey Darkey, President Elect, Association of Ghana Industries Chief Executive Officer and Members of Council, Association of Ghana Industries Madam Kosi Yankey Ayeh, Chief Executive Officer, Ghana Enterprises Agency Invited Guests, Distinguished Ladies and Gentlemen I am honoured to join you today as Guest Speaker to commemorate the 2 nd anniversary of the AGI-Women in Business initiative.
AGI-Women in Business provides a platform to promote women -owned and women - managed businesses and to influence government policies that enhance their contribution to socio-economic development.
Today’s celebration aims to highlight their successes as well as the challenges these businesses face.
I applaud the AGI for the Women in Business initiative under the able leadership of its indefatigable Chairperson, Mrs.
Amey Obeng.
Given the significant contributions of female entrepreneurs and their businesses to Ghana’s socio-economic journey over the decades, it is only befitting that we shine the spotlight on them and collectively find ways to support them to contribute their full quota to national development.
I pay tribute to Ghanaian female entrepreneurs like the late Dr.
Esther Ocloo of Nkulenu fame whose work to establish the AGI several decades ago continues to bear great fruit for our nation.
Indeed, women are often the unsung heroes in our national discourse.
Our great grandmothers, grandmothers, mothers, sisters, and many of us have been entr epreneurs at one time or the other producing critical goods and services for our people.
Indeed, I would argue that entrepreneurship comes naturally to women and is perhaps second nature to women.
In addition to full time female entrepreneurs, many women in formal employment also tend to get involved in one small business or the other to help supplement household income and to improve their financial standing.
According to the World Bank, forty-four percent of micro, small, and medium enterprises (MSMEs) in Ghana are female-owned, and this sector accounts for about 92 percent of all businesses and contributes about 70 percent of Ghana’s GDP.
More recent data shows that Ghana’s private sector is dominated by wome n entrepreneurs, second only to Uganda , according to the 2019 MasterCard Index of Women Entrepreneurs.
Women entrepreneurs and the businesses they own and lead , however, face serious challenges.
Data suggests that these businesses tend to remain smaller and less profitable than those owned by men, owing in part to limited access to business support services , markets, and finance.
Goldman Sachs estimates that 70 percent of women -owned formal SMEs are unserved or underserved in terms of access to credit, amounting to a US$285 billion credit gap , and closing this credit gap in developing countries could lead to a 12 percent increase in per- capita GDP by 2030.
According to an African Development Bank report on Affirmative Finance 3 Action for Women in Africa , there is an estimated US$42 billion financing gap for African women entrepreneurs across business value chains, and only 16-20 percent of women in Sub- Saharan Africa are able to access long-term financing from formal financial institutions.
Here in Ghana, female entrepreneurs are eight percent times less likely than men to access the kind of capital and other financial services and products that they need to start or scale up their businesses, according to the World Bank’s 2017 Global Findex Survey.
What is more, t he economic shock from the COVID-19 pandemic has impacted women - owned and women-led businesses disproportionately, given that many female entrepreneurs operate in the informal sector or in the MSM E sector.
For some of these, their business es remain closed or struggle to regain lost markets and opportunities.
Our theme for today’s celebration, “Women-Led Businesses: Exploring Finance Channels and Market Access for Growth”, is therefore timely.
As I mentioned earlier in my remarks, limited market access and limited access to finance remain some of the key challenges for all stages of businesses owned by women in Ghana .
The good news is that there are growing opportunities to address these bottlenecks that limit women -owned and women -led businesses, and I will shed some light on these.
Market access for Ghanaian businesses continues to expand although the participation of female entrepreneurs in some of Ghana’s fast-growing economic sectors such as technology remains marginal.
Beyond Ghana, there is great potential for women to harness the benefits of the AfCFTA which creates a single Africa market , as well as many other opportunities beyond Africa, thanks to technology and e-commerce platforms among others.
These market opportunities offer hope to women-owned and women-led businesses in Ghana to scale up and to compete with their peers abroad.
To address the limited access to finance challenge, a lot is required both on the side of female entrepreneurs and their businesses on one hand, and financial institutions on the other.
On the demand side, female entrepreneurs must understand various financing options such as bank financing, and financing by specialised deposit-taking institutions (SDIs) such as savings and loans companies, finance houses, micro finance companies, and rural and community banks who tend to focus on MSMEs .
The Bank of Ghana has p ut in place mechanisms to support the delivery of credit on a sustainable basis to businesses, including women-owned MSMEs.
These include a credit bureau-based reporting system that ensures that banks and other licensed lenders report on credit behaviour (prompt loan repayments as well as defaults) on all borrowers, and that creditors check on borrowers’ credit behaviour before they make credit decisions on loan applications.
Responsible borrowers therefore stand a better chance to access more loans and at reasonable interest rates as their credit risk will be lower.
Also the Bank of Ghana’s Collateral Registry registers all collateral (over movable and immovable assets) provided by borrowers to licensed creditors and facilitates the delivery of credit to borrowers (especially women) who might not have access to immovable asset collateral.
While banks and SDIs continue to expand their client base and lend to more businesses , including women-owned and women-led businesses, it is important to stress that bank and SDI financing which is loan-based, isn’t the only type of funding available for businesses and indeed may not always be ideal for a business depending on its stage and its needs.
4 Sometimes, longer-term and more patient forms of capital may be more appropriat e for a business in lieu of or in addition to bank or SDI loans.
Such alternative sources of funding include venture capital and private equity financing, equity and bond financing from the stock market ( which includes the Ghana Stock Exchange’s Alternativ e Market and Ghana Fixed Income Market), finance leasing and hire purchase, all of which are available in Ghana today.
For example, Camelot Ghana Limited, a Ghanaian business owned by the renowned business stalwart, Mrs.
Elizabeth Villars, took the bold step to list on the Ghana Stock Exchange (GSE) in 1999 to raise long-term equity capital to grow its business.
Since then, the GSE has further relaxed entry requirements for small business es that would like to list their equities to seek funding from the public.
Finding and accessing the right financing at the right time is critical for business survival and growth, and women -owned entrepreneurs must fully understand all options available to them and the requirements for accessibility, including good governance, good financial management, and compliance with regulatory and technical standards, among others.
Furthermore, women entrepreneurs and business leaders must overcome their risk aversion for seeking financing from the financial market, and conf idently take advantage of opportunities that exist to tap into appropriate sources of financing for their businesses.
For example, it turns out that while women entrepreneurs tend to be more prudent and responsible borrowers and actually tend to pay back their loans and on time, they are often afraid to borrow the amounts of money their businesses need even when they can afford to pay back.
When women do not ask enough for financial support, they do not receive what their businesses need, and this hampers the growth and survival of their businesses.
On the part of banks, SDIs, other financial services providers, there is the need to understand the women market to specifically tailor products that work for them.
Women entrepreneurs form a significant and viable unique market that needs to be understood and serviced to the benefit of all.
Given the critical role of women-owned and women-led businesses in our socio -economic development, our entire nation stands to gain significantly by equipping these businesses to scale up with good business practices, technology and technical support, and access to finance.
By supporting women-owned and women-led businesses, we would be positioning our economy to grow on a sustainable basis.