Determinants of financial inclusion in the Effutu Municipality

Abstract

In spite of plethora of evidence endorsing the significance of financial sector development which includes capital markets and the banking sector in the developing economies, usage of financial services is skewed towards the rich individuals and those who are already better off, neglecting the poor and those who are in the remote areas. Using the Ghana Living Standard Survey Round Six (6) data, focused on four main research objectives. This study adopted the descriptive and exploratory research design and the estimation of data using the probit model, the study revealed that religious affiliation, educational level, age, marital status, sex and hours worked significantly influence the likelihood of owning bank account in Ghana. The study revealed that majority of the respondents that were excluded from the banking sector were as a result of poverty or financial difficulties and less than 2 percent are involuntarily excluded from formal banking services. The findings again showed that majority of the respondents applied for loans for business, followed by consumption, education and agricultural activities. Lastly, majority of the respondents were refused loans because they were unable to provide collateral security, followed by inability to get a guarantor, low salary and inappropriate purpose of loans. The researcher recommend that, Ghanaian authorities should promote the ownership of formal bank account by dismantling challenges associated with gender, education and income level. Also, policy makers should formulate policies that can transform the economy to boost production and improve income level of its citizens. Management of bank institutions should from time to time promote community education in order to provide the necessary information to individual household in order to broaden the knowledge and understanding of individual related to their operations.