Rural banks asked to strategize against mobile money competition

Mobile money operations posing major competition to rural banks

Capital required to start MOMO operations relatively cheaper

Banks must be innovative to keep up with MOMO operations


Head of Legal and Compliance Department of the ARB APEX Bank, Mr Curtis Brantuo, has stated that Mobile Money operations pose major competition to rural and community banks (RCBs).

He called on rural banks to step up their game in order to remain relevant in the financial sector.

Data from the bank of Ghana last year revealed that the total value of mobile money transactions far exceeded the value of cheque transactions, by GH¢389 billion in the first quarter.

Whilst, total value of MoMo transactions was estimated at about GH¢569 billion in 2020, that of cheques was about GH¢180 billion.

Also, mobile money usage has become more rampant as the processes involved have proven to be less cumbersome compared to bank transactions.

Mr. Brantuo was addressing a virtual 40th Annual General Meeting (AGM) of the Manya Krobo Rural Bank Limited at Kpong Ensign College of Public Health near Odumase-Krobo in the Lower Manya Krobo Municipality over the weekend.

“MoMo services are relatively cheaper, their ‘know your customer’ (KYC) requirements are relatively less cumbersome, the set-up for a MoMo operator is less than one per cent of the capital outlay required to set up a brick and mortar bank branch and also MoMo services are often real-time, giving the customer real convenience and comfort,” he said.

According to him, the competition in the financial space will become keener because several Fintech companies had been licensed by the Bank of Ghana (BoG) to enable them to operate as a Dedicated Electronic Money Issuer, which would allow them to provide services such as Cash In and Cash Out, Airtime Top-Up and International Money Transfers.

He noted that “this calls for more hard work and innovation from our rural and community banks”.

Mr. Brantuo however noted that experts had already predicted that COVID-19 was going to be with the world for a long time “therefore, all the RCBs must endeavour to put the right structures in place to ensure the sustainability of their banks even in the very difficult and unpredictable times,” he said. Read Full Story