The T-bills are the only investment instruments that banks holding floats for telecommunication companies are allowed to invest in, according to the directive meant to ensure that customers of mobile money get a fare deal from their savings.

The directive, which was issued in the last quarter of 2016, took effect on December 1, and makes it possible for owners of mobile money accounts to earn appreciable amounts from their savings.

The Head of Payment Systems at the BoG, Dr Settor Amidiku, told the GRAPHIC BUSINESS in Accra that the directive enjoins banks and their partner telecommunication companies to pay MOMO customers 75 per cent of the interest accrued on the investment on the T-bills.

The remaining 25 per cent, he said, was to be used to service administrative costs.

“Apart from that, you the customer will also receive 80 per cent interest on the money,” he said.

The President of the Ghana Association of Bankers (GAB), Mr Alhassan Andani, confirmed the development in a separate interview and expressed the hope that the initiative would help give value for money to MOMO customers.

Growth of MOMO

Payment of interest on MOMO started in September, last year, about two years after the service gained currency in the country.

In spite of being relatively new, MOMO services, which virtually turn the mobile phones of customers into bank accounts, have witnessed tremendous growth, with total float ending November, last year at GH¢1.01 billion.

The amount was about 102 per cent higher than the GH¢500.45 million recorded in the same period last year.

To help contain the growth and create an enabling environment for further expansion, the BoG, in mid 2015 issued some guidelines for the sector, which it has been implementing.

Key among them is an electronic payment product that makes it possible for people to purchase T-bills with their mobile phones using their MOMO accounts.

With the service, low income earners can purchase T-bills for as low as GH¢1, using the mobile phone.

Implications

Beyond building an investment culture, the initiative is expected to help smoothen monetary policy decisions by bringing more cash into the formal sector.

Dr Settor explained that the decision to invest MOMO savings on T-bills will also help protect the interest of subscribers by making their savings readily available as and when they need them.

Currently, Ghana is the first country to allow MOMO customers the opportunity to purchase T-bills with their mobile phones in Africa despite being a late comer in the business.

Going forward, Dr Settor said the bank would continue to monitor developments in the sector to be able to introduce policies that would help engineer growth while protecting the interest of customers.

Currently, a chunk of the MOMO float in the banking sector is controlled by CAL Bank and Fidelity Bank, with bits and pieces spread across the remaining 29 banks.

The service is rendered by four of the five telecomunications ­­companies —  Vodafone, MTN, Airtel and tiGO — in the country.