Designing a strategic investment framework for BanqMoni Limited
Date
2018-04
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Abstract
BanqMoni Limited is a financial technology service provider that started operations in
August 2017 with a mission to making banking convenient for Ghanaians. This mission
is achieved through its platform that allows individuals to directly make instant deposits
into any bank account within Ghana at any time from their mobile money account.
The firm has a reliable source of funding from shareholders that ensure that cash outflows
for the year are budgeted and catered for. Owing to this, revenue earned through the
platform sits in a zero-interest current account with the firm’s settlement bank
unproductive. Thus, BanqMoni is unable to deploy its surplus cash efficiently. According
to the CEO, this problem tends to erode the firm's future earnings as the bank continues
to deduct bank charges.
Insights from literature reviewed affirms that there is a tradeoff between profitability and
liquidity. Maintaining unproductive surplus cash has an implicit cost in the form of losing
out on possible investment income. Hence, it is essential for firms to hold an optimum
level of cash to avoid the adverse effects of keeping excess cash or low cash levels.
Based on in-depth research, cash management and investment analysis framework that
replicates the Miller-Orr cash management model was designed in Microsoft Excel to
ascertain the firm’s optimal cash as well as how much funds to invest and returns to
expect from the investment. An investment policy was also documented to enable the
firm to make prudent investment decisions. Through this framework, the firm will be able
to maximize its surplus cash and earn additional investment income that will improve the
overall profitability of the firm.
Description
Applied project submitted to the Department of Business Administration, Ashesi University, in partial fulfillment of Bachelor of Science degree in Business Administration, April 2018
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Applied project
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Keywords
cash management, Ghana, mobile money, FinTech industry, investment, BanqMoni