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Fintech tools, Ghana Card will improve SME access to Banking – UMB CEO

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Nana Dwemoh Benneh, CEO of Universal Merchant Bank

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Emerging Financial Technology (FinTech), Regulatory Technology (RegTech) tools as well as the national identity (Ghana) card will serve to remedy the age-old problem of access to finance by Small and Medium-sized Enterprises (SMEs), as they will aid financial institutions – particularly banks – in their Know-Your-Customer and risk assessment checks, Chief Executive Officer of Universal Merchant Bank (UMB), Nana Dwemoh Benneh, has said at the just-ended Commonwealth Trade and Investment Summit where he was the only African on the Financial Services: Fintech to Consumer Finance panel.

Despite accounting for upward of 70% of all businesses in the country, SMEs have historically struggled to access credit on account of porous identification systems. Banks, on the other hand, have had to resort to charging what, in their estimation, are appropriate risk-adjusted rates; even as the industry average of non-performing loans hovers at around 15%. By contrast, similar-sized economies on the continent are less than 10%, with South Africa at 3.9%; Rwanda at 4.4% and Nigeria at 6%.

Making submissions as part of a panel discussion at the 2021 edition of the Commonwealth

Trade and Investment Summit, Mr. Benneh stated that KYC has historically been successful in smaller, communal, informal settings, but the shift to a more formalised financial setup is responsible for the lag.

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He however expressed belief that the measures will have a domino-effect, as improved customer authentication will help reduce compliance and operational costs for the financial services providers (FSPs), as well as aid regulators to ensure financial integrity while promoting financial inclusion.

“We have FinTechs which are very much focused on using telephony activity and social media activities to build the profiles of individuals and employing innovation such as facial recognition to enable us quickly identify the clients and conduct KYC at reduced times,” he said while speaking on the theme ‘Fintech to Consumer Finance’.

“In Ghana, we have seen the state implement a more robust ID platform called the Ghana Card that dovetails and enhances these fintech innovations. This is being reconciled with telco data, health insurance and pension data, and the expectation is that this will facilitate ease of access to credit and payment solutions for SMEs,” he added.

Other panellists, including Chairman of the Commonwealth Enterprise and Investment Council, Lord Marland Odstock; External Relations Minister-Government of Jersey, Senator Ian Gorst; Regional CEO-Insurance Growth Markets at Prudential, Wilf Blackburn; CEO at Crown Agents Bank, Bhairav Trivedi; and Global Head SC Ventures at Standard Chartered, Alex Manson, were unanimous in their belief that financial inclusion is a basic human right and technology will help spur its growth in the medium- to long-term.

The aim of the Summit, which was held in person and virtually, was to gather Commonwealth government leaders and business leaders to focus on rebuilding economies and identifying new trade opportunities in a pandemic-adjusted era.

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