Cracking the
Business Financial Code – Insights from the Old Mutual Financial Services
Monitor
As businesses
usher in the new year, it is the perfect time for entrepreneurs to revisit
their financial strategies, set realistic goals, and implement robust budget
plans. Whether businesses are finalizing their budgets in January or using this
period to refocus their financial outlook, proper planning ensures that they
can transform aspirations into actionable steps and maintain control over their
spending throughout the year.
One valuable
tool that can guide this process is the Old Mutual Financial Services Monitor
(OMFSM), which offers deep insights into the financial attitudes, perceptions,
and behaviours of working Ghanaians, both in the formal and informal sectors.
Rita Boateng, the Customer Service and
Marketing Executive at Old Mutual Ghana, emphasizes that the OMFSM is unique
because it aims to improve the financial wellbeing of Ghana and other key
African countries. "This is aligned with Old Mutual’s purpose of becoming
the first choice for customers to sustain, grow, and protect their prosperity
throughout their lifetime," Boateng says.
Key findings
from the OMFSM
The OMFSM
focuses on urban and peri-urban working Ghanaians aged 25 to 59 years, earning
at least GHS 1,000 monthly. The survey uncovers significant trends in the
entrepreneurial landscape:
Poly-jobbing and business ownership
24percent of working Ghanaians are poly-jobbers, supplementing
their primary income with side hustles or additional work. Furthermore, 54percent
of Ghanaians own or part-own a business, with 64percent operating solo and 32percent
employing between 1 to 5 people. Notably, 78percent of self-owned businesses
fall within the informal sector, highlighting the challenges of financial
inclusion for many entrepreneurs.
Financial stress and debt management
A significant 65percent of business owners report being highly
financially stressed, with 42percent constantly worried about their income.
However, the data shows a disciplined approach to managing debt, with 94percent
of business owners confident their financial situation will improve. Their top
financial priorities include securing income (73percent), ensuring safe
investments (46percent), and managing expenses (44percent).
Savings goals
Entrepreneurs
prioritize savings for business continuity, their children's education, medical
expenses, and emergency funds. While retirement savings rank low, with only 21percent
saving for a comfortable retirement, there is a clear need for greater emphasis
on long-term financial planning.
The role of informal savings
Informal savings groups, such as susu clubs, play an essential
role in the financial lives of business owners. Approximately 44percent of
entrepreneurs participate in susu schemes, a higher rate than non-business
owners (28percent). In addition, 34percent of business owners hold unbanked
cash savings, citing convenience and security as key reasons for this
preference.
Retirement planning
The
low priority placed on retirement planning is concerning, as only 16percent of
business owners are confident that their savings will be sufficient for
retirement. With only 21percent of business owners saving for retirement, there
is a pressing need for greater awareness of retirement solutions, such as
annuities, which are largely underutilized.
The need for
financial advisory support
Despite these
challenges, business owners demonstrate resilience. However, the OMFSM reveals
that financial advisory services are underutilized, with only 31percent of
entrepreneurs seeking professional guidance—compared to 21percent of
non-business owners. Alarmingly, 49percent of business owners do not know where
to turn for financial advice, underscoring the need for more accessible and
reliable financial advisory services.
The way forward
The findings of
the OMFSM highlight the need for entrepreneurs to focus on improving their
financial literacy, especially in areas such as retirement planning, debt
management, and savings. Financial services companies have a critical role to
play in filling the gaps by providing affordable and accessible financial
solutions, as well as increasing awareness of retirement products.
For Ghanaian
entrepreneurs, the road to financial security and business growth involves
strategic planning, a clear understanding of their financial needs, and access
to the right tools and resources. By leveraging insights from the OMFSM and
seeking professional advice, entrepreneurs can better navigate challenges,
secure their financial futures, and achieve long-term success.
The Old Mutual
Financial Services Monitor continues to serve as an invaluable resource,
shedding light on the realities of entrepreneurship in Ghana while providing
actionable strategies to foster financial stability and growth in the years
ahead.
