Recent digitisation efforts by government will go a long way in supporting Non-Bank Financial Institutions (NBFIs) to be more resilient and sustainable, banking and corporate governance consultant, Dr. Richmond Atuahene has noted.

According to him, the introduction of digital address system coupled with the Ghana Card can help do away with issues of loan applicants failing to provide accurate information; which in some cases makes it difficult for banks to retrieve loans given out.

“The recent introduction of a digital address system countrywide is probably one of the most important requirements for the development of an economy, particularly the financial sector.

“This will go a long way to crack down on serial defaulters in the financial landscape. Borrowers are now aware that they can be tracked down and so are unlikely to default. It is very imperative that Ghana has now put in place a comprehensive digital addressing system as a matter of priority,” he explained.

He added that a digital address system reduces the risk premium for bankers and other players in the financial landscape: “Borrowers are aware that they can be tracked down and are unlikely to default. It is one of the important systems that will go a long way to support credit-delivery infrastructure which can be compared to the UK post-code system. Currently, with the Ghana Card you can be uniquely identified by a number on the National Identification Authority database that will be easily accessible for background checks”.

He stated that he expects these developments to reduce loan default rates, as defaulters cannot easily switch to other financial institutions or even make changes to their names or Ghana Card number to access another loan.

He spoke at the maiden Ghana Microfinance Institutions Network (GHAMFIN) forum under the theme ‘Building a resilient and sustainable non-bank financial institutions sector in the wake of current economic challenges’.

Dr. Atuahene reiterated that the digital address system, which is nationwide, is probably one of the most important requirements for the development of any economy and its financial sector.

Digitisation of NBFIs’ services to deepen financial inclusion

To help deepen financial inclusion, Dr. Atuahene advised NBFIs to adapt to changing times by introducing products and services that are driven by technology. He added that digital transformation is also changing the way the NBFIs sector operates, hence the need for them to be prepared to meet that demand.

He noted that the expansion of mobile money, rise of fintechs and the introduction of blockchain, super platforms and artificial intelligence have all changed the face of financial services – adding that traditional financial services and channels have evolved from brick-and-mortar to digital.