Banks, others to benefit from US$2.6m grant

The Ministry of Finance has partnered the Government of Switzerland to introduce a $2.6 million Remittance Grant Facility (RGF) project to provide financial assistance to companies that develop or introduce innovative but less costly remittance products and services in the country.

The grant is available to banks, non financial institutions, mobile transfer operators, mobile network operators, financial technology companies (Fintechs) and other commercial entities that are licensed to receive remittances.

It is aimed at supporting the development of affordable and accessible products and services that extend the reach of remittances to rural areas in the country.

It will also support projects that facilitate the development of remittance-backed financial products such as deposits and savings accounts, insurance and forms of investment in order to increase financial inclusion.

The Minister of Finance, Mr Ken Ofori-Atta, stated at the launch on    May 5 that the grant would help companies to conduct various market research studies on remittances to inform and shape the implementation of the grant.

The overall goal, he said, was to enhance the impact of remittances on economic growth and poverty reduction.

Funding amount

The pilot phase of the project has a funding amount of US$2.6 million, which will be provided by the Government of Switzerland through its State Secretariat for Economic Affairs (SECO).

The SECO’s development cooperation programme in the country focuses on promoting Ghana’s inclusive and resilient economic development.

The Government of Ghana will also provide counterpart support through the Ministry of Finance.

Mr Ofori-Atta said the project was expected to address the operational constraints associated with remittance flow channels into the country. 

It will also encourage the development of innovative products and services.

He said the intervention would also assist in the development of the remittance market by deepening and widening the scope of remittance flow across the country, while reducing the cost of remittances.

“This will also encourage the entry of new actors, aid development and increase the use of formal remittance service delivery channels,” he stated.

Eligible organisations

The Charge d’Affaires at the Switzerland Embassy, Mr Roland Fischer, said the RGF aimed at crowding in the private sector to come up with innovative solutions in the remittance industry.

He said eligible organisations would be given grants to develop products and services on remittances to meet the objectives of the scheme.

He noted that indirect beneficiaries of the project would include the poor, the rural population and Ghanaians in the Diaspora.

Mode of operation 

The facility will function as a challenge fund, a competitive financing facility to fund innovative ideas.

The first round will co-fund successful applicants by issuing grants of between $20,000 and $250,000 based on the scope of proposed activities and the likely contribution of the project to the RGF’s objectives.

KPMG International Development Advisory Services (IDAS) is the fund manager of the RGF, and it will be in charge of setting up the RGF.

The IDAS also has the responsibility for the day-to-day management and monitoring of project implementation.