CEO of Mobile Money Fintech Limited (formerly MTN MoMo), Shaibu Haruna has said that the next frontier for the company is to champion a shift in the Ghanaian economy from a prepaid one to a credit one by driving responsible borrowing.
He was speaking in an exclusive interview monitored by Techfocus24 on Joy FM regarding what direction MMFL intends to go now that it is completely separated from its mother company, MTN Ghana.
Shaibu Haruna noted that even in developed economies, majority of citizens live on credit because the system is built to ensure responsible borrowing and accountability.
According to him, African economies are largely not strong enough to empower citizens to always acquire what they need with ready cash, so it is important that the opportunities are created for the people to be able to easily access credit to acquire the things they need with borrowed money and pay later.
“We are therefore working with our stakeholders including the financial institutions, the fintechs who are our innovation partners and the regulators to build the rails that will ensure easy access to credit within the context of responsible borrowing,” he said.
He believes that this pursuit by MMFL will open the door for Ghana to become a credit economy rather than the remaining a prepaid one.
Speaking of responsible borrowing, Shaibu Haruna noted that so far, a lot of the people who take advantage of the loan products on the MMFL platform have been responsible borrowers, except for a few who are dodgy and are failing to refunds the loans they take. Indeed, some even succeed in using several fraudulently registered wallets or even stolen wallets to borrow more money and refuse to pay back.
In 2023, one of the digital loan partners of MMFL, Ecobank reported a 4% default rate on its US$600 million loans given out via its Xpress Loan product on MMFL, and that came to as much as US$23 million of unpaid digital loans. The other loan products like QuickLoan, Ahomkah Loan and Fast Cash also complain of similar challenges with borrowers but have not put figures to it yet.
Shaibu Haruna said the situation is a challenge but MMFL and its partners are working together with the regulator to reduce the rate of non-performing loans within the mobile money ecosystem.
Savings and Investment
According to him, the other frontier for MMFL is to encourage savings and investment, so the company will be rolling out more products in that regards.
Already, the mobile money wallet is a savings wallet by default because every quarter, interest is paid on daily balance for the period. Additionally, the MMFL MoMo App and the USSD channel (170) have investment opportunities that allow customers to buy treasury bills and stocks in listed companies.
Shaibu Haruna said MMFL will be introducing more of such products to ensure that the platform deepens financial inclusion.
MoMo Fraud
Touching of the fight against mobile money fraud, he noted that it has become even more critical for all players in the ecosystem to join forces to fight the challenge, because fraudsters often move from one network to the other just to evade arrest. But if the players work together such fraudsters can be traced easily.
He recalled that at a recent forum led by MMFL, it was strongly proposed that the players should jointly build a command centre that will enable them easily identify fraudsters and quickly deal with them, instead of the usual long process of reporting, which give fraudsters more than enough time to outwit the system.
The MMFL CEO also cautioned mobile money users to stay alert and not allow themselves to be outwitted through social engineering, saying that often when the victim is lured by a fraudster into divulging of sensitive information or authorization a transaction, it becomes difficult to help such a victim because the records show that they played a role in the whole process that led to them being defrauded.
He assured the public that MMFL will continue to work with its partners and regulators to give value to customers, churn out very relevant and consumer-centric products and services, and also deepen measures to protect consumers from fraudsters.
