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.

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