On 1 July 2007, the Bank of Ghana launched a new currency, the Ghana Cedi (GH¢), to replace the old cedi (¢), which was used since 1967. This is the second time that Ghana adopts a new currency, since 1965 (the date of introduction "first cedis"). The new Ghanaian cedi has the particularity of being the strongest currency in Africa. One Ghana cedi now costs just over one U.S. dollar, and is roughly equivalent to 1.25 euro.This new currency has naturally an impact on the business of financial intermediation and, in particular, that of microfinance institutions (MFIs). First, at the internal level, the transition to the new currency means a reconfiguration of their management tools (information system, accounting), a review of internal documentation (loans cards, loan applications files, etc.), training of loan officers, to adapt to the new situation.
But it is mainly in terms of relationship to beneficiaries that the change in currency has more impact on an MFI like ID-Ghana. Because it targets a particular segment of the population (the Poor and mostly illiterate, in poor neighborhoods of Accra and its periphery), ID-Ghana has placed particular emphasis on education and awareness of its beneficiaries, several months before the arrival the Ghana cedi. The two trainers of the organisation have added courses on the new currency in their set of curricula, and have addressed the issue at almost all trainings sessions they delivered.
The task of ID-Ghana and all MFIs operating in Ghana, however, is facilitated by the fact that the withdrawal operations of the old currency will still be possible until December 31st, 2007. Until then, the two currencies can coexist and be used legally. This period will enable the MFIs to continue their information and sensitazation work, gradually replace their internal documentation (no sudden replacement and therefore no additional costs in the short run), and familiarize their staff with the new currency.MFIs can also count on public awareness campaigns on a large scale and in local languages, launched in the media (radio and television in particular) to avoid confusion and facilitate transactions. The new currency has the advantage of allowing greater efficiency and safety in payment transactions, users are now less at risk from traveling with large sums of money (as was the case with the former cedi).
Published by Racine Ly (former programme coordinator)
