Drivers of financial inclusion in Ghana: Evidence from microentrepreneurs in the Wa Municipality of the Upper West Region

Abstract

Globally Financial inclusion provides an opportunity to promote equal access to resources for all. One of the crucial catalysts for microenterprises development is access to the financial market. However, the growth of many microenterprises has been truncated in Ghana due to limited access to financial opportunities. Despite this challenge, little is known about the drivers of financial inclusion in Wa Municipality of the Upper West Region of Ghana. This paper examines the drivers of financial inclusion of microentrepreneurs in the Wa Municipality of the Upper West Region of Ghana. Using a close ended questionnaire, this study employed an exploratory survey design to collect data from 200 engaged in trading, manufacturing, and services. The respondents were sampled using a simple random sampling technique. Given that the outcome variable is binary, the study used a binary probit regression model for the data analysis. The results predicted that religion, awareness of loan services, business registration, and preparation of financial statements drive financial inclusion in Wa Municipality. From the results, the study recommends that financial service providers should consider social networks, entrepreneurial practice, gender and religion as sensitive drivers of financial inclusion. In addition, financial education should be intensified as knowledge of the available financial products is a key driver of financial inclusion in the Municipality. While this study has contributed to the body of literature on financial inclusion in Ghana, further research is necessary to identify consumer financial needs to meet clients’ expectations.