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Demand for financial services by households in Ghana

Author

Listed:
  • George Mawuli Akpandjar
  • Peter Quartey
  • Joshua Abor

Abstract

Purpose - The purpose of this paper is to investigate household financial choice and the determinants of financial services in rural and urban households in Ghana. Design/methodology/approach - Data from the Ghana Living Standard Survey 5 (GLSS 5) are used to estimate the participation of a household in a particular financial sector and what determines this choice. Findings - The results from Tobit and conditional logit models account for households' demographic characteristics and their financial decisions. The Tobit estimates show that household size, age, sex, marital status, occupation, income, remittances and shocks determine households' participation in the financial markets. Conditional logit model results suggest that locational characteristics are important in obtaining financial services from particular sectors of the financial market. The results also suggest that when the alternatives of financial services are available, rural households are more likely than urban households to obtain their financial services from the informal financial sector. Originality/value - This current study contributes to the existing literature from the Ghanaian perspective.

Suggested Citation

  • George Mawuli Akpandjar & Peter Quartey & Joshua Abor, 2013. "Demand for financial services by households in Ghana," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 40(5), pages 439-457, April.
    • Handle: RePEc:eme:ijsepp:v:40:y:2013:i:5:p:439-457
    DOI: 10.1108/03068291311315322
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    References listed on IDEAS

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    1. Ross Levine, 1997. "Financial Development and Economic Growth: Views and Agenda," Journal of Economic Literature, American Economic Association, vol. 35(2), pages 688-726, June.
    2. Modigliani, Franco, 1986. "Life Cycle, Individual Thrift, and the Wealth of Nations," American Economic Review, American Economic Association, vol. 76(3), pages 297-313, June.
    3. Harris, Mark N & Loundes, Joanne & Webster, Elizabeth, 2002. "Determinants of Household Saving in Australia," The Economic Record, The Economic Society of Australia, vol. 78(241), pages 207-223, June.
    4. Perraudin, William R M & Sorensen, Bent E, 1992. "The Credit-Constrained Consumer: An Empirical Study of Demand and Supply in the Loan Market," Journal of Business & Economic Statistics, American Statistical Association, vol. 10(2), pages 179-192, April.
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    Cited by:

    1. Heenkenda, Shirantha, 2016. "The Determinants of Dropouts from Voluntary Pension Scheme: Evidence from Sri Lanka," MPRA Paper 72481, University Library of Munich, Germany.

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