The Chamber of Technology (COT), representatives of licensed financial technology (Fintech) firms in the country, have flatly denied allegations that fintechs are responsible for the alleged US$10.6 billion unaccounted for inbound remittances between 2019 and 2023.
Sections of the local media recently alleged over last fiveyears, the central bank only recorded US$2.8 billion out of the estimated $4.7 billion remittances that came into the country, with a whopping US$10.6 billion unaccounted for.
The reports then singled out Fintechs as being responsible for some bypass activities that enable them to hoard forex abroad instead of those moneys coming into the country to support national development, and shore up the strength of the local currency.
A call was then made on the Bank of Ghana to do a forensic audit into the operations of fintechs in the remittance business to ensure that a significant chunk of that US$10.6 billion comes into the country.
But in a statement, the Chamber of Technology said “As the representative body of licensed fintech companies in Ghana, we find these claims misleading and potentially damaging to the financial ecosystem.”
The Chamber stated that, under the current regulations, fintechs do not receive foreign exchange directly from money transfer operators (MTOs), so they do not even have the opportunity to manipulate forex operations to the tune of US$10 billion in five years.
They explained further that the licensed banks receive the forex inflows from MTOs, the banks then convert the forex to cedis at regulated exchange rates, and the fintechs which operate within the remittance space only disburse the cedis to recipients through mobile money wallets or other digital channels.
“This structure ensures that forex flows remain within the formal banking sector, with banks playing a central role in managing and reporting foreign exchange inflows,” the statement said.
The Chamber broke it down further as follows:
The process of bringing remittances into the country is a collaborative effort involving:
• Banks – which receive forex directly from MTOs, convert it, and provide liquidity.
• E-money issuers (mobile money operators) – which issue e-money and facilitate disbursement to e-money wallets.
• Fintech firms – which provide the technological infrastructure for efficient and secure transfers.
“Any discussion about remittance flows must, therefore, consider the entire ecosystem rather than focusing solely on fintechs,” the statement said.
Meanwhile, the Bank of Ghana has recently announced that it is expanding its audit of remittances to include traditional banks and not just the fintechs and other non-banking players in the remittance space.
Find the full statement from the COT on this link , where it explains what benefits the fintechs have brought to the remittance space, particularly helping to terminate international remittance directly into people’s mobile money wallet at a far cheaper rate than when the money is terminated via other channels. In the process, the fintechs have also saved customers the stress of having to go and queue at banking halls and other places to redeem remittances.
