Financial Exclusion: What Drives Supply and Demand for Basic Financial Services in Ghana?

Saving and Development Journal, Vol. 33, No 3, 2009

32 Pages Posted: 22 Apr 2009 Last revised: 14 Aug 2010

See all articles by Eric Osei-Assibey

Eric Osei-Assibey

Nagoya University; University of Ghana

Date Written: April 22, 2009

Abstract

The majority of people in Sub-Saharan Africa does not have a basic bank account and are financially excluded from main stream financial services. This paper examines factors that drive geographic exclusion of banking services to rural communities and households’ demand for a basic bank account in Ghana. Using rural community based and household survey datasets, the study finds that banks’ decision to place a branch in a community are positively influenced by the market size, the level of infrastructure such as energy and communication facilities in the area, market activeness etc. but are negatively influenced by the general level of insecurity associated with crime, conflicts, natural disasters etc. Conversely, households’ demand for a bank account appears to be strongly driven by both market and non-market factors such as price, illiteracy, ethno-religion, dependency ratio, employment and wealth status as well as proximity to a bank.

Keywords: Financial Exclusion, Banks’ Branch Location Decision, Bank Deposit Account, Ghana

JEL Classification: G21, R51, R20

Suggested Citation

Osei-Assibey, Eric, Financial Exclusion: What Drives Supply and Demand for Basic Financial Services in Ghana? (April 22, 2009). Saving and Development Journal, Vol. 33, No 3, 2009 . Available at SSRN: https://ssrn.com/abstract=1393318

Eric Osei-Assibey (Contact Author)

Nagoya University ( email )

Furo-cho, Chikusa-ku
Nagoya-City, 4648601
Japan

University of Ghana ( email )

PO Box 25
Legon, Accra LG
Ghana

Register to save articles to
your library

Register

Paper statistics

Downloads
266
Abstract Views
1,604
rank
114,717
PlumX Metrics