Remittances: BoG explains role of fintechs, MTOs

The
Bank
of
Ghana
(BoG)
has
clarified
the
role
of
FinTechs
in
the
remittance
space.

In
an
explainer
shared
on
the
Bank’s
social
media
handle,
it
emphasized
that
local
FinTech
companies
authorized
by
the
Central
Bank
do
not
mobilize
foreign
exchange
(FX)
from
abroad.

Instead,
Money
Transfer
Organizations
(MTOs)
based
abroad
handle
the
receipt
of
remittances.

The
mobilized
funds
are
then
paid
into
the
nostro
accounts
of
local
partner
banks,
with
FinTechs
managing
the
downstream
payment
to
beneficiaries.

Some
market
watchers
recently
blamed
FinTechs
for
withholding
FX
abroad.

Specifically,
some
media
reports
indicated
that
approximately
$12
billion
in
remittances
to
Ghana
went
untracked
and
unaccounted
for
by
the
Bank
of
Ghana
and
the
Auditor
General
from
2018
to
2022.

But
the
 Central
Bank
dismissed
media
reports
claiming
that
$8
billion
has
been
withheld
by
newly
licensed
Money
Transfer
Operators
(MTOs)
and
11
Fintech
companies
in
the
last
two
years.

According
to
these
reports,
data
discrepancies
exist
between
the
World
Bank
and
the
Bank
of
Ghana
regarding
remittance
inflows.

The
World
Bank
tracked
a
total
of
$21.1
billion
in
remittances
to
Ghana
from
2018
to
2022,
while
the
Auditor
General’s
reports
on
the
Bank
of
Ghana’s
consolidated
statements
of
foreign
exchange
receipts
and
payments
accounted
for
only
$9.5
billion,
leaving
a
gap
of
about
$11.6
billion.

The
Bank
of
Ghana’s
explainer
corrects
this
misconception,
noting
that
the
confusion
arises
from
a
misunderstanding
of
the
distinct
roles
of
MTOs
and
FinTechs.

The
Bank’s
statement
aims
to
clarify
these
roles
and
address
the
erroneous
impression.

Watch
the
explainer
for
more
details.