Dr. Ernest Addison
THE BANK of Ghana has asked the general public to access crowdfunding products to be provided by regulated entities for their donation, improved disclosure, transparency and accountability needs.
Locally known as “susu”, “nnoboa” or “ntoboa”, crowdfunding involves the collection of funds, usually in small amounts from individuals to support projects or causes.
This has been traditionally employed over the years by families, groups or communities to mobilise money to meet the needs of their members.
Within the last 10 years, a number of laws have been passed and directives issued to position the financial sector to leverage digital technology for inclusive growth. Among these laws are the Payment Systems and Services Act 2019 (Act 987), the Data Protection Act 2012 (Act 843), Banks and Specialised Deposit Taking Institutions Act, 2016 (Act 930), the Securities Industry Act, 2016 (Act 929) and the Cyber security Act 2020. Collectively, they provide the legal basis for digital delivery of crowdfunding products and services, on which Bank of Ghana’s crowdfunding policy is anchored.
It said models of crowdfunding currently permitted under Bank of Ghana’s policy were donation-based and reward-based crowdfunding. Such models entail the collection, holding and disbursement of funds, and are available to banks, specialised deposit-taking institutions (SDIs), dedicated electronic money issuers (DEMIs) and enhanced payment service providers (EPSPs).
In the case of DEMIs, it said merchant wallets must be created and dedicated to the collection of donations.
“The minimum due diligence requirements corresponding to the merchant account type stated in NOTICE NO. BG/GOV/SEC/2020/15 dated December 3, 2020 shall apply. However, the EPSP will require the support of a bank or SDI to fully deliver the service since they do not issue electronic wallets or accounts to their customers.
“In addition to the models stated above, there are other variants of crowdfunding such as debt (or peer-to-peer lending) and equity models which deal with securities and loans and leverage payment platform for the collection and disbursement of funds. By their nature, they fall within both the regulatory jurisdiction of the Bank of Ghana and the Securities and Exchange Commission (SEC). To this end, the Bank of Ghana will collaborate with SEC to prevent possible regulatory arbitrage and to strengthen the stability of the financial system,” it said.
A business desk report