Telcos reject claims of unregulated financial activities

By | May 30, 2016

Business News of Monday, 30 May 2016



Tara Squire Tara Squire

The Director of Mobile at Tigo Ghana, Mr. Tara Squire has rejected claims that some financial activities of telecommunication companies in the country are not properly regulated.

There have been calls in recent times from some financial experts for a proper regulation of activities of telcos as they spread their operations into core financial services, such as giving out loans.

But speaking to Citi Business News at the sidelines of the 10th anniversary celebration of the Ghana Investment for Electronic Communications (GIFEC), Mr. Squire maintained that telcos only provide a channel to connect the informal sector to economic activities to enhance financial inclusion in the country.

“I think the mobile financial services sector is a regulated industry. The Bank of Ghana (BoG) regulates our activities with the help of the National Communications Authority (NCA). It is not an unregulated industry. There are new requirements and regulations that have actually been passed this year,” he said.

Debunking the notion that telcos are going into unauthorized areas, Mr. Squire maintained that the financial activities of telcos are rather one of the most regulated in the country. He explained that even though telcos lead in the campaign for financial activities, their operations are mostly underwritten by banks with supervision from the BoG.

“No telco funds a loan, it’s a financial service provider who already gives out loans who uses the telecommunication channel as a means of giving out and collecting loans,” he said. According to him, the processes required cannot allow a telco to provide loans without guidelines from the BoG and the NCA.

“No telco has become an underwriter, loans involve risks, and somebody has to underwrite the loan, and assess the risk level and decide what interest rate would be paid and how to collect it. We don’t do that job,” he said.

He was of the opinion that with the growth of financial inclusion, there is no way the informal sector can be prevented from accessing financial activities as mobile penetration grows substantially in the country.

“As long as the mobile phone can be used to transfer and collect money, the banks will always find it convenient to use technology to optimize their operations,” he said. He appealed to stakeholders in the industry to embrace the new dimension mobile technology has taken to enhance financial inclusion in the country.