Fintech refers to the computer applications and technology that aids or enables banking and financial services.
The fintech landscape in Ghana is poised to evolve rapidly, anticipating major progress in the coming years.
However, the sector is still facing some challenges such as:
- The fintech funding gap: Many startups struggle to find the funding they need to innovate and grow, which has the potential to limit the ecosystem altogether.
- Fintech in Decline: Ghana was once an early adopter of African fintech, however, significant changes to the investment landscape including a changing economy, regulatory landscape, and taxes associated with e-levy has negatively impacted investor appetite in Ghana.
- Increased Competition: Ghana is competing with both Tanzania and Benin for investor attention, indicating that the local hullabaloo surrounding fintech is waning. Additionally, the lack of local angel investors or seed funding has hampered the regulatory process and the ability to develop MVPs.
To resolve some of the issues above, the current President of Ghana, John Dramani Mahama, has committed to US $50 million to enhance growth within the fintech industry.
The Good
- This project signifies the beginning of a new chapter for fintech by delivering crucial funding and an investment opportunity to change the financial landscape of a country.
- Encouraging Fintech Innovation: The funding will incentivize venture capital activity in Ghana and allow startups to build new products and solutions to solve challenges faced by national SMEs, like financial exclusion and ineffective payment systems.
- Training and Supporting Entrepreneurs: This initiative offers more than just funding by providing training programs to help entrepreneurs develop key competencies in compliance and operations, and formulate their market development plans for growth/sustainability.
- Restoring Ghana’s Fintech Credibility: The government’s strategy is a move to help restore Ghana as a fintech investment and innovations destination, that is open to new ideas and increasing financial inclusion.
- An Innovation Hothouse: Ghana, through initiatives like the Fintech Growth Fund, has the potential to be an innovation hothouse for fintech innovation and the emergence and growing of unicorns alike – improving any number of economic metrics on the continent.
Collaboration from all angles:
The successful implementation of the fund will depend on collaboration from the public and private sector. The Ghana FinTech and Payments Association (GFPA) reiterates the critical importance of inclusive policy making.
In today’s disruptive environment, financial technology (FinTech) has emerged as an increasingly critical sector. FinTech represents the different ways that innovation in technology has developed new business models with new ways of thinking in the financial market. Despite differing types, FinTech represents different models that all have the same mission: to improve efficiency and change the way things are done in finance. As FinTech matures and becomes more commonplace, it is expected that it’s the form and function of finance which dramatically affects the efficiency and strength of the international financial system.
To summarize
The fintech sector leads to the development of technology and economic growth. As technology becomes more important to sustainable global development, it is especially important to study this sector to realize the best outcomes for all.
