Fintech innovation fund coming

-To give startups greater investor visibility – Dr Bawumia

By Isaac AIDOO, Accra

Government has announced it will establish an Innovation Fund to promote the development of the financial technology (Fintech) industry in Ghana and ensure that startups have greater investor visibility.

Vice-President Dr Mahamudu Bawumia told stakeholders in the fintech industry at the launch of the maiden 3i Africa Fintech summit in Accra yesterday acknowledged that “most of the digitalisation that we are seeing are homegrown. It is driven by local fintechs and local IT firms.”

The summit set to hold between May 13 – 15, 2024, is themed ‘From Innovation to Impact: Investing in Africa’s Financial Sector to drive Africa’s Transformation.’

The event, being organised by the Bank of Ghana (BoG) and the Development Bank Ghana (DBG), in partnership with Elevandi, a subsidiary of the Monetary Authority of Singapore, would attract governments, businesses, policymakers, academia, investors, and thought leaders.

It is to spearhead transformative discussions, address key growth and investment opportunities, and explore how market players in the financial ecosystem are leapfrogging in digital transformation and pioneer the much-needed dialogues and actions to drive Africa’s Fintech growth.

The summit will attract 15 keynote speakers of eclectic and influential backgrounds, about 15 Central Bank Governors spanning five continents, three Heads of States, over 100 global investors, asset managers, Tech Executives and many more.

In addition, the Summit will provide the opportunity for professional and career advancements through the integrated online learning channels, which will offer purposefully, designed programmes in partnership with experienced partners like Cambridge SupTech Lab, De University of Ethereum and National Banking College.

Participants are expected to discuss and collaborate on unlocking Africa’s full potential on fintech and the digital economy.

Touting the achievements of government in the digital space, Dr Bawumia said the investment and innovation undertaken by government and its positive impact on the lives of the citizenry as well as the efficiency in the operations of the various relevant state institutions could not be overemphasized.

He maintained that the patronage of the launch event underscored “our belief in the power of technology to enhance productivity and connectivity, to empower individuals through FinTech startups, as well as Small and Medium Scale Enterprises that increase innovation with the potential to promote efficiency in the operations of institutions and businesses.”

He said the path to Ghana’s digital revolution was through fintech, hence the need to support them financially to thrive.

The Vice President rallied stakeholders to join hands and cooperate to achieve digitalisation through awareness, infrastructural development, capacity building, improvement of the legislative and conducive regulatory environment, and investment in local capabilities.

“I urge all stakeholders to come on board to support and participate in the upcoming 3i Africa Summit to make it a memorable one, while achieving its full benefits.”

Dr Bawumia therefore encouraged all stakeholders in the industry to join forces in improving the legislative and regulatory environment to enhance the payments ecosystem and position Ghana on the path of sustained financial inclusion.

The power of technology, Dr Bawumia noted, would improve productivity and connectivity to empower individuals through fintech startups, as well as small and medium scale businesses to increase innovation and efficiency in the operations of institutions.

It was against this background, he said, that the Government, in the past seven years, had focused on pursuing a digital transformation agenda as part of its economic strategy at the individual and institutional levels.

“The objective is to ensure digital empowerment for a prosperous future in this accelerated digital era, where the use of modern and emerging technologies has become commonplace and a catalyst for growth, progress, and prosperity,” Dr Bawumia stated.

“It is no news that the Government, under the leadership of President Nana Addo Dankwa Akufo-Addo, has paid special attention to digitalisation.

This has been actively supported by various government institutions and regulators as part of the broader Ghana Digitalization Agenda to advance digital transformation.”

The Vice-President highlighted some of the challenges the country faced in advancing its digitalisation agenda and believed that by leveraging technological innovations, it would leapfrog the development process, overcome legacy problems, and improve both the economic and public sectors.

“For instance, to address the issue of no unique identification for citizens and residents, the Government issued the national biometric ID cards, popularly known as the ‘GhanaCard’ to provide a unique and centralised identification system for all Ghanaians,” Dr Bawumia noted. ]

“The acceptance of the ‘Ghana Card’ as the sole identification document for financial transactions in Ghana would in the long run help in the reduction of Non-Performing Loans and mobile money fraud.” The Government, he said, also leveraged the GPS Technology to implement a digital address system, which resulted in the unique address for all properties in Ghana.

“Also, the Land Use and Spatial Planning Authority provided street names and house numbers for every street in Ghana for easy identification and navigation,” he recalled.

“Furthermore, to promote financial inclusion and reduce the dominance of cash for payments, the mobile money payments interoperability

Governor of BoG, Dr. Ernest Addison, acknowledged that players in Africa’s financial technology space needed increased access to funding, noting the impact lack of funding for fintechs had on their ability to be in good standing with regulatory requirements.

He said there was the need to address challenges facing fintechs, including the information gap which had deprived startups of the needed investor visibility.

Dr. Addison noted that the 3i Africa summit would be a major catalyst for promotion and innovation in financial service, which is why we encourage participation of all relevant stakeholders within the ecosystem.

“We urge all innovators, financial institutions, the media, industry players, investors, start-ups, technology players, and all other stakeholders to join us to make history together with this maiden summit to catapult the FinTech revolution in Africa even further,” Dr. Addison said.

He stressed the need to address the information gap between investors and FinTech startups to stimulate the payment ecosystem.

This, he said, would help unleash the full potential of FinTech startups to contribute meaningfully to the economic development of the African continent.

He bemoaned the lack of funding which could significantly stunt the growth of the FinTech movement in several ways.

Dr. Addison said deficient funding could also hinder FinTech companies’ ability to navigate regulatory requirements and meet compliance standards, which were non-negotiables, especially in Ghana’s and Africa’s financial industry.

“Without sufficient capital, brilliant ideas, and prototypes of FinTech startup solutions with the potential to address the diverse financial service needs have failed to progress to production.

Furthermore, a FinTech is only as strong as its members and in that same vein, a lack of funding could ultimately impact a FinTech’s ability to attract and retain premium talent,” he said.

Dr. Addison said Africans had an advantage in the digitization race due to the bulging tech-savvy youthful population, the high mobile phone penetration, the consistent expansion of mobile network access and more importantly, the rising homegrown FinTech solutions.

Minister of Finance, Dr. Mohammed Amin Adam, was confident that the Summit will help address the critical challenges faced by players in the fintech industry.

“Across governments, we are committed to deploying innovative solutions that can drive financial inclusion, bolster economic resilience, and unlock new avenues for growth,” Dr. Amin pledged. According to him, the Government is committed to implementing programs that generate growth from within with a focus on the growth of small businesses.

It is in this regard that the Bank of Ghana, in collaboration with DBG and the University of Ghana Business School (UGBS), launched the MSME Innovative Finance Project, a research study to determine the current and emerging challenges of SME financing in Ghana.

In all these, DBG has been a catalyst and glue, by bringing key players like the Bank of Ghana, University of Ghana, and a host of other government agencies and commercial banks together, and driving the agenda in line with their mandate of supporting SMEs to secure a transformation of the economy.