Download the MiDA Newsletter, 8th Edition - MiDA Ghana

Quarterly Newsletter | Eighth Edition June, 2011Millennium Development AuthorityMiDA Supports the Deployment ofTwo Systems to Modernize Ghana’sPayment Systems(CCC & ACH)The Ghana Cheque Codeline Clearing (GCCC) & GhanaAutomated Clearing House (GACH) Systems have beenlaunched in Accra. The two Systems which were set up withfunding from the Millennium Challenge Account GhanaProgram are necessary ingredients to modernizing Ghana’spayment systems.The MCA Ghana Program which focuses on AgriculturalTransformation supported the Modernization of Ghana’spayment systems, as a way of removing one of the majorconstraints that hinder commercial agriculture, lack of finance.Low financial inclusiveness is a common phenomenon amongthe rural folk who are largely made up of farmers. Theunbanked farming communities who do not have an incentiveto route their finances through financial institutions havelittle or no opportunity to access credit to support any businessventure.The predominant non-cash payment instrument in Ghanahas historically been Cheques. The Bank of Ghana has thusbeen instrumental in ensuring the efficiency, reliability andtimeliness of the cheque clearing process. In the late 1990s,the Bank introduced the Magnetic Ink Character Recognition(MICR) technology and the standardization of paper paymentinstruments to enable the semi-automation of cheque clearing,which traditionally was within the Accra Clearing zone.The limited automation and the manual clearing of chequesin other regions meant the cost of handling cheques and thelength of the clearing cycle remained high and long. Thechallenges associated with this clearing system and thedetermination of the Bank to improve cheques clearing ledto the decision to migrate to Cheque Codeline Clearing(CCC).The CCC System supports a 48 hour clearing cycle for chequesthroughout the country. This represents a significantimprovement when compared to the three to nine dayscheque clearing cycles which were in operation across thecountry under the old clearing arrangements.The Ghana Automated Clearing House (GACH) is anelectronic payment network that may be used by individuals,businesses, financial institutions and government organizationsto transfer funds to creditors through their banks (directcredits) or to collect funds from debtors through their banks(direct debits). GACH payments are fast and secure; theyenhance cash management and have lower costs comparedto traditional paper payments. Automated direct credit anddirect debit payments have been non- existent in the Ghanaianbanking system partly due to the tradition of cheque usageand the low level of automation.1