BOG Launches Regulatory Sandbox in Ghana
The Bank of Ghana (BOG) recently launched regulatory sandbox, opening the Regulatory and Innovation Sandbox, from February 13, 2023 to March 14, 2023, to admit the first cohort of participants. BOG also released a set of frequently asked questions on the regulatory sandbox. Eligible participants include banks, specialized deposit-taking institutions, savings and loans companies, microfinance companies, financial holding companies, dedicated electronic money issuers, payment service providers, and unlicensed fintech start-ups.
The regulatory sandbox is envisaged as a supportive and controlled policy environment to enable financial service providers to test innovative products, services, and business models in a live environment under the supervision of a regulator. The sandbox will support new digital business models not currently covered explicitly or implicitly under any regulation; new and immature digital financial service technology; and innovative and disruptive digital financial service products that have the potential of addressing a present financial inclusion challenge. For financial service providers, the regulatory sandbox presents an opportunity to test the viability of their product, service, or business model on a smaller scale and enables them to identify and address any issues before the product, service or business model is approved by the regulator for rollout. For start-ups, the sandbox will provide the opportunity to shape their solutions, learn the rudiments of regulatory compliance with the support of the regulator, and receive adequate preparation toward fulfilment of licensing requirements.
BOG would give preference to products and services leveraging blockchain technology, remittance products, crowdfunding products and services, electronic know your customer (e-KYC) platforms, regtech (regulatory technology), suptech (supervisory technology), digital banking, products and services targeting women financial inclusion, and innovative merchant payment solutions for micro, small and medium size enterprises or MSMEs. The first cohort window, however, will largely accept innovations from among the priority areas of payments, remittances, crowdfunding, and micro-lending. A participant shall typically be admitted for a duration of six months. However, a participant may request for extension of the testing period for a duration of no more than three months and BOG may grant such a request when satisfied with the rationale of the request. Foreign companies are not allowed to apply to participate in the BOG regulatory sandbox. However, BOG encourages foreign companies to incorporate a subsidiary in Ghana and satisfy the 30% Ghanaian equity participation in accordance with Act 987 to be eligible to apply
participate in the regulatory sandbox.
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Keywords: Middle East and Africa, Africa, Ghana, Banking, Regtech, Suptech, Regulatory Sandbox, Fintech, Crowdfunding, BOG
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