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The Role of MTOs Policies in Regulated Remittance Inflows to Ghana from Abroad

23 Aug 2023

The Atlas Of Humanity reported that about 4 million Ghanaians are living in foreign countries as migrants. Most of them have travelled abroad to earn a living as they are pressed by the acute poverty resulting from unemployment.

They find jobs abroad, earn a living and then send money to Ghana to financially help their family back home.

If you notice, you will realise that although Ghanaians travel abroad due to the financial issues they face in individual capacities, their collective financial contribution to the country’s economy has been substantial.

A World Bank report said that the quantum of inward remittances to Ghana in 2022 was $4.66 billion, up from $4.17 billion in 2021. These remittances give a boost to the Ghanaian economy.

But wait!

How does the World Bank know about the exact quantum of inward remittances to Ghana?

Have you ever thought about it?

One answer may be that the remittances flow to Ghana through the World Bank. Right? But is it so? Do remittances flow through the World Bank, or do you use multiple small channels to transfer funds back home?

Well, the answer is rather obvious.

It is simply because several online money transfer operators comply with the regulations monetary regulatory authorities put in place in countries in which these financial institutions operate.

These policies are known as the Money Transfer Operator (MTO) policies. These are designed specifically for online money transfer companies.

This blog will throw light on MTO policies and see how these policies facilitate the flow of remittances to Ghana. Let’s start!

What are Money Transfer Operator (MTO) Policies, and Why are these Required?

MTO policy is the regulatory framework a country’s government and monetary regulatory bodies put in place to regulate the operations of online money transfer companies and banks.

Under this policy framework, the MTOs are licensed and regulated by a government authority to provide financial services, including wire transfers, money orders, and online money transfers across borders or within the same country.

When you wish to send money to Ghana online from overseas, you find one such service provider and transfer your funds. Such a service provider could be a bank or a money transfer company.

The MTOs that operate under these policies provide a legal platform for transferring funds, which are regulated by the governments and are thus recorded. This is how global financial institutions such as the World Bank keep track of inward remittances.

MTOs largely provide a legal platform to perform financial services, the alternative to which is the illegal ways to transfer money, which forms a part of the black economy. Any financial transaction carried out illegally is never recorded and never benefits the economy except the parties involved, and that, too, is at high risk.

For a better understanding of MTO policies, let’s quickly understand the illegal methods of transferring funds to Ghana from overseas.

Understanding Hawala – An Illegal Method to Transfer Funds

You travel abroad from Ghana to earn a living and support your family financially. 

Learn here how to move abroad from Ghana to find jobs.

For this, you want to save money while you transfer funds. Right? Since the legal channels charge fees and are somewhat costly, the illegal channels jump in to offer you some cost-effective ways to transfer funds.

Hawala, in this regard, tops the list.

Hawala is an informal method to transfer funds. It does not involve any physical money. It is rather a trust-based system to transfer funds.

Hawala operates outside of the traditional banking system between Hawala brokers, who operate based on trust to balance Hawala brokers’ books.

Since it is an informal method to transfer funds and is also known as underground banking, several countries have declared it as an illegal method. Its transactions are neither recorded nor regulated.

A Brief Insight into Hawala

  • Hawala is an informal method to transfer funds, also known as underground banking
  • It has been used since ancient times
  • Criminals normally use Hawala to transfer funds to sponsor criminal activities, as Hawala transactions cannot be traced
  • Hawala is considered illegal in several countries because it is not regulated

Money sent through Hawala can only benefit the sender and the recipient conservatively, but if a problem arises, you cannot seek redressal.

What is the Alternative, Then?

Well, the simple alternative is any financial institution that operates within the government’s regulatory framework and policies. It could be a bank or an online money transfer company that offers services to transfer funds online across borders with several benefits.

Let’s now see a few steps that can help increase the flow of remittances through a money transfer to Ghana.

Regulating and Facilitating the Flow of Remittances to Ghana

The following few steps can facilitate the flow of remittances to Ghana.

Tax Amnesty

The Ghanaian government can offer tax amnesty to the MTOs. It will encourage the service providers to offer money transfer deals to the migrants that could yield more financial benefits.

More Partnerships

The government must ensure that different financial institutions enter into partnerships to encourage the use of formal methods. It can also create a competitive environment in the remittance industry.

Use of Digital Technology

The increased use of digital technology can mitigate the risk involved in online money transfers. This will encourage migrants to use these digital channels, which will boost the flow of remittances to Ghana.

Technological Innovation

Several financial institutions fall victim to technological stagnation. It means that these institutions fail to keep pace with emerging trends and the ever-changing demands of the customers. As a result, customers are likely to use illegal methods to send funds across borders.

Uniformed Remittance Structure

The Ghanaian government needs to establish a uniform structure for inward remittances along the lines stipulated by the IMF in 2009. This is only possible with the legal, registered and formally regulated flow of inward remittances to the country.

Several countries have taken such initiatives, which, on the one hand, have discouraged the use of illegal methods and, on the other hand, facilitated the flow of inward remittances through legal means.

Wrapping Up the Discussion

With an operational presence in over 100 countries worldwide, ACE Money Transfer seamlessly complies with the fiscal regulations of the respective governments. Therefore, your online money transfer to Ghana via ACE will be legally regulated while offering you several benefits like speed, safety, live and competitive exchange rates, and much more for a fraction of the amount being sent as fees.


What are MOTs?

Money Transfer Operators (MTOs) are the agents that offer online money transfer services. These could be banks, online money transfer companies or any other financial institutions offering such services within the government’s regulatory framework.


What are MTO policies, and why are they important?

MTO policies refer to the rules and regulations governments and monetary regulatory bodies put in place to oversee the flow of remittances. These policies allow governments to regulate remittances, record them and know about their origin. 


How do MTOs facilitate the flow of inward remittances to Ghana?

MTOs offer legal and regulated money transfer platforms to Ghanaian migrants. Through MTOs, remittances are recorded by the governments in the light of which the governments make policies to facilitate the flow. 


Why do people resort to illegal methods to transfer funds?

Firstly, in the absence of legal methods, a void is created to transfer funds, which illegal channels like Hawala try to fill. Furthermore, illegal methods are largely used by criminals to fund illegal activities.


What is the alternative to illegal money transfer methods?

The simple alternative is to find a service provider that observes seamless compliance with government regulations. A simple internet search can be helpful in this regard.


  • Ghanaian diaspora

(Ghanaians in the World (

  • Inward remittances

(Personal remittances, received (current US$) - Ghana | Data (


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