Financial Inclusion: What's next?

A woman selling roasted plantain and groundnuts at the roadside is approached by a customer, looking for an easy meal to curb the day's hunger. The customer places the order, and after being told the price, whips out their phone to pay with MoMo. "Ei no oh, I don't take MoMo, only cash", the seller exclaims. The customer gazes at the woman in amazement, and after digging into the depths of her bag, manages to pull out a note that just covers the cost of the food. "Madam in this day and age you have to get MoMo oh," the customer cautions as she walks away with her meal.

A story like this could easily happen about 15 years ago, when MoMo was new in Ghana and hadn't been widely adopted, but now, ever increasingly, the customer's shock becomes more and more valid. Mobile money transactions are the order of the day in Ghana and across Africa. One no longer needs a bank account or internet access to perform electronic transactions. With a feature phone and USSD, anyone can send money and pay any bill to anyone anywhere in the country, through mobile money.

Since the inception of these technologies such as mobile money, financial inclusion has rapidly expanded and reached previously unbanked populations, and now economic transactional volumes have risen exponentially. But now that everyone has MoMo, what's next? Has true financial inclusion been realized?

Matilda Asante-Asiedu, second deputy governor of the Bank of Ghana, said at the recently held 3i Africa Summit in Accra, that the nation has made gains in financial inclusion, but it must expand its "architecture" investment to further close gaps and attract capital. So now the conversation around financial inclusion is shifting from a just a simple head count of mobile money wallet owners to something deeper.

To understand what comes next, we must look at the metrics of success, both globally and locally.

For years, the standard for tracking financial inclusion has been access, or when a mobile money or bank account is opened. However, tracking just that metric can mask information that may be more relevant, like how active are those accounts, and how are they used? After all, an account can be open and just be transacted on maybe once a quarter, but the data would include it as a statistic supporting growing and active financial inclusion.

In answer to concerns like this, the Ministry of Finance has adopted a multidimensional framework to measure financial inclusion holistically. This framework evaluates three dimensions, namely:

Access - The physical and digital proximity to financial institutions, ATMs, and mobile money agents.

Usage - The regularity, depth, and diversity of financial product consumption over time (e.g., formal savings, credit, and insurance).

Quality - The relevance, simplicity, and safety of financial products, alongside robust consumer protection and financial capability.

With these metrics in mind, let's consider our position more critically now. Active MoMo accounts in Ghana stand at 112.55% (Ministry of Finance Financial Inclusion Report, 2023). But what picture does this paint? A consumer might use MoMo daily for transfers to friends or family, or casual payments, but true economic empowerment relies on systems like formal savings, credit networks, and safety nets.

Looking at the state of existing financial security products raises some eyebrows. For pensions products, only 37.47% of the adult population is registered with formal pension schemes.

Total insurance coverage sits at 40.9% of the adult population, with the industry premium contributing less than 1% (0.94%) to the national GDP.

For the roadside plantain seller, having a MoMo wallet is a vital tool she needs to transact with her customers, but without a path to formal micro-credit, business insurance, or a pension, she is vulnerable to economic shocks, which true financial inclusion seeks to prevent.

To answer the question of what's next, policymakers and the private sector must pivot from expanding reach and access to improving the quality of what products the population has access to. We need to move beyond basic transfers to insurance and credit scoring tools. Some work has already begun, with the introduction of products like Y'ello Save and MyOwnPension on MoMo, but these are basic tools that can be leveraged to do more.

There also needs to be consistent educational campaigns to equip the population with the capability to manage their digital wealth safely, what with threats of fraud and data privacy violations growing alongside financial inclusion initiatives.

The transition from a purely cash economy to an unbanked population empowered by mobile wallets was Ghana's first digital and financial revolution. The next steps demand that we turn these systems into pathways for wealth creation and equitable empowerment, which will result in long-term economic resilience. We must change the perspective through which we see financial inclusion, not just as a mere statistical milestone, but as a critical foundation for national prosperity.