The role of financial inclusion in improving household well-being

Abstract

Using a nationally representative household survey data collected from Ghana, this paper investigates the relationship between financial inclusion and household well-being. The paper computes a comprehensive index for financial inclusion incorporating all its dimensions: availability, accessibility, usage and quality. Our econometric analyses employ both discrete and continuous models to produce robust results. The main result indicates that there are significant welfare gains from increased financial inclusion irrespective of its measure and control for endogeneity. The results also suggest that enhanced financial inclusion increases the likelihood of improving food consumption, medical treatment, cash income and school attendance outcomes. Thus, there is a clear policy implication: increasing financial inclusion will significantly contribute to the attainment of some key Sustainable Development Goals (SDGs).