Ghana, in collaboration with Switzerland, on Friday launched a Remittance Grant Facility (RGF) of $2.6 million to provide financial assistance to companies to develop innovative remittance products and services at a relatively low cost.
The project is planned to support companies to develop affordable and accessible products and services that extend the scope of remittances to the rural areas as well as benefit Ghanaians in the Diaspora.
It also aims to fund projects that facilitate development of remittance-backed financial products such as deposits and savings accounts, insurance and forms of investment in order to increase financial inclusion.
The Government of Switzerland, through its State Secretariat for Economic Affairs (SECO), whose development cooperation programme focuses on promoting Ghana’s inclusive and resilient economic development, is providing the $2.6 million for the pilot phase of the project.
Ghana is providing counterpart support through the Ministry of Finance.
Various market research studies on remittances are to be conducted to inform and shape successful implementation of the grant with the overall goal of enhancing the impact of transfer payments on economic growth and poverty reduction.
Mr Ken Ofori-Atta, the Finance Minister, who inaugurated the project, said the scheme was projected to address operational constraints associated with remittance flow channels into the country and to encourage innovative product and service development.
He said the intervention would help deepen and widen the scope of remittance flows countrywide and encourage the entry of new actors.
It is also seen as a move that would increase the use of formal remittance service delivery channels and cut down cost.
Mr Roland Fischer, the Chargé d’Affaires at the Embassy of Switzerland, said: “While we at SECO consider it not the role of the Government or a development partner to directly establish remittance channels and provide services, the RGF aims at crowding in the private sector to come up with innovative solutions.”
Eligible organisations such as banks, non-financial institutions, money transfer operators, mobile network operators and other commercial entities that have the capability and are licensed will be given grants to develop products and services on remittances to meet the objectives of the scheme, he said.
The Facility will function as a Challenge Fund, a competitive financing facility to fund innovative ideas.
The first round of the facility 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.
The funding window will be live from May 5, 2017 and will remain open for applications up to May 26.
To apply, companies must visit www.rgfghana.org to download the application form.Guidance notes and information on eligibility criteria can also be found on the website.
KPMG International Development Advisory Services is the Fund Manager of the Remittance Grant Facility and is in charge of setting up the RGF.
It has the responsibility for the day-to-day management and monitoring of project implementation.
Other collaborating institutions are the Bank of Ghana and Oxford Policy Management. The project ends in 2020 with the option for a potential second phase to end in 2024.