Financial institutions discuss poverty alleviation
Top banking executives in the micro and universal banking industry and experts have discussed the need to spur access to financial service to the poor in especially rural areas in Ghana.
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During a roundtable discussion on financial inclusion in Ghana the stakeholders, including private and public sector players, agreed that there was the need to increase access to quality financial services for the poorest populations through innovative products.
The round table discussion which was held in Accra was organised by Care International, Ghana, a leading humanitarian organisation fighting global poverty, in collaboration with United Nations Capital Development Fund (UNCDF), a capital investment agency for the world's 48 least developed countries and Fidelity Bank, the third largest bank in Ghana.
It was themed “scaling up digital financial inclusion for rural women towards the achievement of the sustainable development goals.
Definition
Financial inclusion is defined by the United Nation (UN) as access to reasonable cost for all households to a full range of financial services including savings or deposit services, payment and transfer services, credit and insurance.
The goals of financial inclusion, according to the UN includes the availability of sound and safe institutions governed by clear regulation and industry performance standards, financial and institutional supranationally to ensure continuity and certainty of investment and completion to ensure choice and affordability for clients.
Financial inclusion has been identified as critical to achieving inclusive sustainable economic growth and development.
In Ghana the proportion of adult population using formal financial services rose from 29.4 per cent in 2011 to 40.5 per cent in 2014.
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Globally, two billion people have no access to bank accounts, effectively excluding them from modern economic life. Yet access to savings, credit and insurance are vital for poor people to overcome the insecurity of living on irregular incomes.
Savings groups
In a welcome address, the head of programs at Care International, Ghana, Ms Gifty Blekpe said CARE has pioneered the promotion of village savings and loan associations (VSLAs) for over 20 years, and now reaches over four million people in some selected countries.
To achieve greater global financial inclusion, she said CARE was now exploring how to link these informal savings groups with formal financial service providers including national and international banks.
In Ghana, she said Care International had partnered with Fedelity and mobile service provider to offer community savings groups in remote areas access to full-service banking using mobile phones.
She said mobile financial services programmes have proven to be an effective tool to promote financial inclusion, because it was cost effective, and allows access mobile phone users even in poor and remote areas to have access to financial services.
Microlead
In a remark, the project manager of Microlead , Mr Noel da’Cruz said it was important to bring all the stakeholders who were doing “different things by themselves together” to promote financial inclusion.
“The focus of this meeting is to understand what banks, mobile network providers and other innovators are doing to reach, serve and support access to finance among informal saving groups,” he said.
MicroLead, is a global initiative to support the development and roll-out of deposit services by regulated financial service providers.
Fidelity Bank
Chairing the function, the managing director of Fidelity Bank, Ghana, Mr Jim Baiden said the bank which was the first financial institution in Ghana to set up a financial inclusion directorate which had rolled out innovative products targeting the unbanked population had been able to reach the excluded in the banking sector.
“We have witnessed firsthand the liberating and empowering impact of financial services to women , in difficult to reach communities. We have learnt a lot about the challenges women face and the limitations of digital finance,” he said.
Mr Baiden said despite the growth in mobile phones, women in some rural communities do not have their own phones “they share phones with their husbands. Sometimes it is only the village elder that has a phone,” adding that “The lack of phones can be a real challenge for the scaling up of digital finance.