Ecobank Ghana, in partnership with People’s Pension Trust, have launched a new innovative digital-based pension scheme that allows both formal and informal sector workers the convenience of contributing towards a comfortable retirement on their mobile handsets.
The product, which is available on the Ecobank Mobile App, under Pensions Biller, is primarily targeted at the millions of informal sector workers, who constitute a whopping 71 per cent of Ghana’s workforce, but are largely not on any pension schemes.
Formal sector workers are compelled to make pension contributions through SSNIT (Social Security and National Insurance Trust), but informal sectors workers, like taxi drivers, farmers, table top traders and several self-employed persons, who get paid daily, do not have a compulsory pension scheme.
But the partnership between Ecobank and People’s Pension creates the opportunity for such persons, and even some formal sector workers who want another scheme to augment what they have with SSNIT, the flexibility of making voluntary contributions via the Ecobank Mobile App whether daily, weekly or monthly.
Managing Director of Ecobank Ghana, Dan Sackey said this new partnership is testimony to Ecobank’s avowed commitment to using digital technology to drive financial inclusion and create value for Ghanaians, especially the largely unserved and underserved informal sector.
He said the move has a two-edged sword of ensuring financial inclusion to secure the long-term welfare of informal sector workers, and also unlocking and redirecting capital for long-term national development.
Dan Sackey recalled several other strategic partnerships Ecobank has entered into this year to make life better for Ghanaian, while raising capital for national development. He mentioned the ground-breaking Pensions Back Mortgage Scheme with Enterprise Trustees, the Auto Loan Scheme with a number of automobile companies and the SMEs loan scheme with Proparco.
He said Ecobank would continue to foster more partnership that gives value to Ghanaians and to the economy as a whole.
CEO of People’s Pension, Saqib Nazir, noted that Ghana’s informal sector workers, who are largely underserved with financial services, form part of the 400 to 500 million in West Africa and the two billion people globally who need financial services extended to them.
He said whereas the risk of extending financial services to the informal sector is high, there is also a huge potential of funds to be mobilized from that sector for national development when they are financially included, while creating value and security for the contributors.
Saqib Nazir noted that efforts of financially including the informal sector have been a difficult one over the years, but strategic partnerships like the one between Ecobank and People’s Pension, presents flexible and innovative pension that should enable informal sector workers to easily get on board and secure a future for themselves.
“Through this partnership, both existing and new customers of People’s Pension and Ecobank can be reached with pension services, thus helping to transform individual lives for a better tomorrow. This will have a ripple effect that will drive improvement in the economy,” he said.
According to him, prospective customers can sign on either directly through the Ecobank Mobile App on their handheld devices, or at any of the several Ecobank Xpress Points across the country.
He described the scheme as a game-changer and urged Ghanaians to sign on and encourage others to also sign on and secure their own future.
Director of Research, Planning, Monitoring and Evaluation at the National Pensions Regulatory Authority (NPRA), Amartey Vondee lauded Ecobank for its commitment at partnering insurance and pensions industry players to create innovative products to capture more Ghanaians into the pensions portfolio.
He recalled Ecobank’s recent partnership with Enterprise Trustees to launch the widely-lauded Pension Back Mortgage scheme to enable Tier 2 and Tier 3 pensions contributors to buy and own homes using their pensions contributions as a collateral of sorts.
Amartey Vondee urged more of such partnerships so that the greater majority of workers in Ghana who do not have any pensions, would be provided for.
According to him, 71 per cent of the 11.216 million workers in Ghana are in the informal sector and greater majority of them do not have any pension scheme.
He said as of December 2020, Ghana’s total pension asset was GHC33.4 billion, out of which SSNIT held only GHC11.3 billion, with private pension schemes accounting for GHC22.9 billion.
“Clearly the private pension scheme operators have taken the center stage in the industry and they are proving that people can count on them to create value and secure a future for them.
“I would therefore like to take the opportunity to encourage informal sector workers to take advantage of the opportunities and convenience provided by such partnership like the one Ecobank and People’s Pension has and save towards their own future,” he said.
Mr. Vondee however noted a number of things that discourage people, particularly those in the informal sector from buying insurance policies and contributing to pension schemes. They include the complexity of the language used in communicating such products, and deliberate mis-selling by agents, whose only motivation is to sign people on and make commissions.
He therefore urged insurance and pension companies to “simplify the onboarding process, simplify claims procedures and simplify the terms and conditions. You must also train your agents to avoid mis-selling and stick to the ethics of their profession when selling policies.”