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Empirical Determinants of Traders Access to Credit in Ghana: Does Literacy Level Matter?

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  • Enock Kojo Ayesu

    (Kwame Nkrumah University of Science and Technology)

Abstract

The present study examines the determinants of traders access to credit in Ghana. The study relies mainly on primary data and applies the probit estimation technique to the dataset. The study finds that source of income, collateral security, household size and education is significant in determining traders’ access to credit. Based on these findings, it is recommended that financial institutions should encourage traders to upgrade their educational level on account and record keeping, since this will enhance their basic knowledge not only on their trading activities but also on financial transactions.

Suggested Citation

  • Enock Kojo Ayesu, 2020. "Empirical Determinants of Traders Access to Credit in Ghana: Does Literacy Level Matter?," Economics Literature, WERI-World Economic Research Institute, vol. 2(1), pages 57-70, June.
    • Handle: RePEc:ana:elitjr:v:2:y:2020:i:1:p:57-70
    DOI: 10.22440/elit.2.1.4
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    File URL: https://elit.weri.eu/index.php/elit/article/view/11
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    References listed on IDEAS

    as
    1. Christine Avortri & Alhassan Bunyaminu & T. B. Wereko, 2013. "Factors That Hinder Access to Credit by Small and Medium Scale Enterprises despite the Financial Sector Liberalisation in Ghana," International Journal of Management Sciences, Research Academy of Social Sciences, vol. 1(10), pages 386-404.
    2. Yusuf Ibrahim Kofarmata & Shri Dewi Applanaidu & Sallahuddin Hassan, 2016. "Determinants of Demand for Credit: A Conceptual Review," Asian Journal of Economics and Empirical Research, Asian Online Journal Publishing Group, vol. 3(1), pages 6-10.
    3. Odu, O. O. & Okoruwa, Victor O. & Adenegan, Kemisola O. & Olajide, A. O., 2011. "Determinants of Rice Farmer’s Access to Credit in Niger State, Nigeria," Journal of Rural Economics and Development, University of Ibadan, Department of Agricultural Economics, vol. 20, pages 1-13, June.
    4. Yusuf Ibrahim Kofarmata & Shri Dewi Applanaidu & Sallahuddin Hassan, 2016. "Determinants of Demand for Credit: A Conceptual Review," Asian Journal of Economics and Empirical Research, Asian Online Journal Publishing Group, vol. 3(1), pages 6-10.
    5. Joshua Abor & Nicholas Biekpe, 2007. "Small Business Reliance on Bank Financing in Ghana," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 43(4), pages 93-102, August.
    6. Mamudu A. Akudugu & Irene S. Egyir & Akwasi Mensah‐Bonsu, 2009. "Women farmers' access to credit from rural banks in Ghana," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 69(3), pages 284-299, November.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Access to credit; Traders; literacy level; Probit regression; Ghana;
    All these keywords.

    JEL classification:

    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • F10 - International Economics - - Trade - - - General
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities

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