Ghana’s Finance minister recently announced that 7.5 million Euros had been secured to finance the E-zwich rural branchless banking project, in a bid to deliver quality financial services to the remotest parts of the country while promoting financial inclusiveness for all. (“Government secures 7.5million Euros for e-zwich”-http://news.myjoyonline.com/business/201106/67583.asp) While E-zwich seemed a laudable idea from start, its implementation and benefits has been woeful overtime. Further, sinking 7.5 million euros into this system of payment raises varied concerns. The E-zwich is becoming a colossal waste and another misplaced priority as more investments are secured for its sustenance.
It is ideal for the government to make arguments for inclusiveness, and indeed it sounds commendatory. The truth though is that the E-zwich system has had several bottlenecks in terms of its functionality in the urban areas. It will take more than its implementation in the remote parts of the country for rural folks to embrace this technology. A number of fundamental questions arise. What has been the success of ATM cards and machines in these areas in terms of patronage? How many Ghanaians living in the targeted areas use ATM cards? Unless there is data to support the real preference of virtual money over real cash, what are the government’s projections on how E-zwich will be feasible in these areas?
Apart from the occasional technical hiccups with faulty machines, one of the reasons why E-zwich is staggering in its performance is the lack of creative marketing to increase patronage. How does the government hope to encourage patronage and demand in these rural areas if usability of the system remains the fundamental problem?
Broadly, IMANI is not only concerned about these investments in a failing system but also concerned about the proper role of government as the regulator in the electronic payment industry. While ensuring functionality and usability is important for returns on the heavy investments (about half a million dollars so far made into the E-zwich system by individual private banks), Government should not be seen coercing private companies to adopt E-zwich. The E-zwich system is already in competition with other private local electronic payment systems like mobile money and text and pay. The competition should at least be free of government involvement. For detailed analysis of E-zwich’s depressing urban life, please read our February 2010 alert at http://africanliberty.org/node/985