The Bank of Ghana’s (BoG) recent attempt to regulate digital credit services has been touted as more than just a policy update; it could significantly impact the financial architecture of Ghana’s economy.
This is the observation of banking and financial consultant, Dr. Richmond Atuahene.
Dr. Atuahene, who welcomes the BoG’s move to bring all digital credit services under formal regulation, says this will affect the country’s economy, particularly given the sector’s rapid growth and massive influence on credit access.
In an interview with The High Street Journal, the financial analyst revealed that the regulation will not only streamline the operations of these platforms but also provide the Bank of Ghana with accurate data to calculate the country’s total money supply and credit flow to the private sector.
This, economists say, has significant implications for inflation.
Since these services are not under any formal regulation, the country is at risk having large pools of unaccounted funds in the financial system, which can destabilize the economy if something goes wrong in the sector.
In addition, the bank will be able to accurately account for the amount of credit forward to the private sector either by the banks or these digital credit services.
Dr. Atuahene stressed that regulation will ensure inclusive oversight, bridging the gap between banks, non-bank institutions, and digital lenders. This means policymakers and regulators can design stronger policies rooted in a complete picture of the financial ecosystem.
Considering the amount of money held by these digital credit services, Dr. Atuahene fears that if these digital credit platforms collapse without oversight, it could trigger a systemic crisis.
For him, an oversight, he believes is now imperative to safeguard the country’s financial sector and ensure the general stability of the economy.
As the BoG moves to put the fast growing services under regulatory purview, Dr. Atuahene is convinced that, Ghanaians, under the new framework can expect a more trusted digital lending, a safer financial environment, and a stronger economy built on transparency and accountability.
