20th May 2024

Vice-President Mahamudu Bawumia

Vice-President Mahamudu Bawumia has identified digital identities and mobile money interoperability as two critical pillars African countries need to pay attention to, if the continent is to realise the gains from the fintech revolution.

In his view, a country with no unique digital identity systems and mobile money interoperability between bank accounts and mobile money accounts will ultimately be less financially inclusive.

He noted although Kenya had a head start over many countries in the fintech space with MPS, Ghana is now the fastest-growing mobile money market in Africa and number one in Africa in terms of access to financial inclusion.

“I believe that the absence of unique digital identities and mobile money interoperability between bank accounts and mobile money accounts is a factor we need to pay attention to. We do not want to promote fintech for its own sake. The goal ultimately is to promote financial inclusion, and we must never lose sight of this,” Dr. Bawumia said.

Credit scoring

On the impact of digital identities on credit scoring, the Vice- President noted that credit scoring based on bank accounts will exclude the vast majority of the African population and therefore will be systematically insignificant.

A credit-scoring system is a statistical analysis deployed by financial institutions and lenders to assess a borrower’s creditworthiness.

It helps the lender to determine who is a high-risk or low-risk borrower, and the credit score of an individual can determine the maximum amount the person can borrow, as well as the interest rate to be applied.

In countries where there are no individualised credit-scoring systems, everyone is considered a high-risk borrower, and this generally affects interest rates, which are normally high across board.

“Individualised credit scoring does not exist in over 90% of African countries because the data required by credit reference agencies traditionally to undertake individualised credit scoring does not exist for most countries,” he said.

“How do you do credit scoring in the absence of unique identities for the population? How meaningful will credit scoring be in a country where most of the population is excluded from the financial system? For Africa, the role of fintech in credit scoring going forward will be key because traditional credit scoring follows bank-based models but most of our populations have mobile money accounts and not bank accounts,” he added.

In Ghana, the Bank of Ghana just licensed a new credit reference agency which is going to leverage mobile money accounts, a unique national ID and other databases to provide credit scores to the adult population.


Additionally, Dr. Bawumia challenged African leaders, fintechs particularly those in Africa, and financial institutions to take advantage of the many unique opportunities on the continent to collaborate, innovate and explore opportunities to positively impact the lives of the continent’s people.

He indicated that Africa’s youthful and rapidly increasing population, growing internet penetration and smartphone usage amidst falling internet costs, as well as significant growth in its financial services market present a unique set of variables to complement the growing influence of fintechs in everyday life, especially in ensuring financial inclusion.

“This growth would not come on a silver platter. To further attract and secure such substantial investment, fintech startups in Africa must adopt a multifaceted approach that emphasizes innovation, showcases the expansive market potential, and prioritises regulatory compliance and transparency,” he advised.

He urged startups to continuously strive to develop groundbreaking solutions that address unique challenges faced by African consumers and businesses. He also challenged them “to articulate a clear vision of how their solutions cater to the needs of our growing market, backed by data-driven insights and market research.”

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