People’s Pension Trust (PPT) is set to carry out baseline study into informal sector pensions with funding from the World Bank. The project is to establish the behavioral patterns of farmers towards savings for the future between November 2017 and April 2018. It is expected to boost financial services to some 1300 cocoa farmers in the Suhum and Fanteakwa districts in Ghana.
Aside from serving as the knowledge base for industry players in developing informal sector pensions in Ghana, the outcome is also to expand coverage of the company’s digital pension product to low-income populations in the country and the sub-region as a whole.
Bridging the gap
It is common knowledge there are limited solutions for long-term financial needs of low-income people in sub-Saharan Africa. People’s Pension Trust is, therefore, expected to bridge this gap by offering special pensions products and services tailored to meet the specific needs of the target group. This includes flexibility of deposit where members can contribute to their pension plan on a daily, weekly or monthly basis using cash, mobile money or automatic deduction from their earnings.
Partnership with the World Bank
The World Bank’s independent Policy and Research Centre, the Consultative Group to Assist the Poor, (CGAP) is providing the financial and technical support for the project. This is in line with the Bank’s mission to improve the lives of poor people by spurring innovations and advancing knowledge and solutions that promote responsible, sustainable, inclusive financial markets.
The Centre believes access to financial services empowers the poor by reducing their vulnerability and offering them opportunities to improve their lives.
For, CGAP poor people are therefore considered valued clients of their country’s financial system. CGAP and People’s Pension Trust are thus hopeful the introduction of such an innovative pension product which incorporates all the high-impact features can motivate members to consistently save for their pensions over the six-month period.
The game changer
This notwithstanding, the potential benefits of a pension scheme in one’s retirement age, low-income earners are faced with challenges such as maintenance of their commitment to a plan in the face of income shortages and livelihood-related shocks. Strategies are thus expected to be developed to ensure members adhere to their savings goal and achieve the full benefit of their pensions scheme.
This is where the project appears to be timely as it is expected to provide participants with not only regular information on benefits of contributing to the pension plan but also the flexibility of withdrawal in line with the regulator’s guidelines. C-GAP is hopeful high impact solutions sought from the test models will provide important lessons for the industry at large.
People’s Pension Trust’s CEO, Samuel Bediako Waterberg is excited about “the prospects the project presents especially in upgrading the livelihood of the cocoa farmers.” He says “winning this grant is a significant step towards the company’s goal of providing a pension cover for about 500, 000 Ghanaians in the informal sector in the next five years”.
Culled from myjoyonline.com