hinges on capital mobilization – if financial consumers are not protected well
enough to feel secured to participate in the financial market; whether it being
accounts opening, consumer credit, deposit, insurance or any other financial
instrument, there would be no capital mobilization for development.
For me financial consumer protection and inclusive
finance means inclusive growth. The two are intimately linked together such
that segregating the two would cause an imbalance in the socio-economic
development of a country. Building and maintaining consumer confidence and
trust in the financial markets promotes efficiency and stability which helps to
create positives outcomes for all stakeholders- customers, financial service
providers, government and the larger society.
However with the dramatic surge in the provision and
complexity of financial products in the emerging Ghanaian economy, the
authorities are dealing with a growing number of complaints from the public as
well as increasing media coverage on consumer complaints.
In the build
up to the 2016 Ghana’s election, financial consumer protection became one of
the central themes in the political campaign massages of the two giant
political parties; the national democratic congress (NDC) and the new patriotic
part (NPP). At the time, the financial
service industry was in turmoil – the implosion of financial service firms was
at it apogee with the infamous DKM scandal in mind1.
There were public outcry, accusation and counter
accusation of the government complicity in the infamous DKM scandal and it
failure to account to the people the breakdown in the regulatory framework. In
holding the government to account, the then, opposition party (NPP) presidential
candidate, promised to refund the victims customers investment back to them if
voted to power. The government then, (NDC) responded by reaching out to the
victims with some payment yet whiles not enough was seen as good faith on the
part of the government.
However the government was accused of cherry picking
as it was reported by most media houses though not proven that those who
received the payment were allies of the NDC- that it was a political gimmick
with a net sum of zero. In the end the government lost in all it holding
constituencies in the affected areas including some constituencies that NPP has
never won in an election.
Consumer protection measures are
of high importance and should be given specific attention in countries such as
Ghana where banking with formal institutions is still emerging. The target
client groups, by definition, come from the most vulnerable and low income
segments of the population and the impact of any misbehaviour or predatory
practice by a financial provider has to be particularly taken into account.
This is a major challenge for the credibility and the sustainability of the
whole financial sector. If not properly addressed, any problem could lead to trust
and mistrust in formal financial institutions and loss of confidence in the
banking system altogether.
Within this broad spectrum, two specific areas are
of interest to me.
The first is financial consumer protection policy.
Research questions of prime importance to explore in the Ghanaian financial
consumer protection policy include:
do we protect financial consumers-For example what types of law are used and
how well they work and why we protect consumers in the ways we do.
The second is financial service law and regulation.
I am particularly interested in the methods of regulation. What are we trying
to achieve by regulating:
2. Is it
consumer protection, confidence in the financial market or competition between
is consumer protection designed and incorporated into regulatory framework?
4. If there are breaches in the regulation how
quick does the regulator respond?
there provisions for victim customers to seek redress- for example financial
ombudsman and or internal reporting mechanism for victim customers?
How effective are they?
Are consumers aware of and using them?
do the current regulation, supervision and practices within the financial
service industry bring about inclusive banking and financial services to the
the current practices within the financial service industry conform to
international principles of good practices?
kind of protection and regulation are in the consumer credit sector of the
there predatory practices?
the regulator aware and what action has been taken
new problems are emerging in the market?
I would define my
research as empirical and comparative study of Ghana financial institutions law,
regulation and the financial consumer protection policy. I will compare Ghana’s
regulatory framework against recognised international best practice. The
research will cover the whole country. I would rely on both primary and
secondary sources for my data.
I would design and administer a questionnaire:
access how the current regulation, supervision and practices within the
financial service industry bring about inclusive banking and financial services
to the rural poor?
access the current state of financial consumer protection
identify key consumer challenges and regulatory gaps especially consumer credit
access the level of satisfaction of consumers regarding service delivery and
identify concerns of service providers
The outcome of the
research I believe will highlight the most salient aspects of our financial
consumer protection and any gaps and deficiencies to take care of. Going
forward I would make proposal changes to the existing regulatory instruments and propose best
practices to promote a sound financial consumer protection that would inspire
and maintain consumer confidence and trust in the financial markets.