Financial Literacy and Financial Well-Being in Rural Ghana: Does Level of Financial Information Matter?

The debate on the implications of financial literacy (FL) on financial well-being (FWB) is at the forefront of global policy discussions. However, the literature often overlooks the mediating factors in this relationship and the characteristics of information that have not been thoroughly explored. This paper focuses on the level of information as a characteristic and investigates its mediating effect on the link between FL and FWB in the rural setting of Ghana. The study employed the Partial Least Squares Structural Equation model with a reflective-reflective higher-order construct to examine these linkages. Using an instrument adapted from existing studies and validated prior to administration, data were collected from 663 households in Ghana’s Upper West Region. The results show that financial literacy significantly impacts financial well-being. Moreover, financial literacy influences the extent of financial information individuals seek. Additionally, acquiring financial information is positively related to financial well-being, suggesting that access to and utilisation of financial information can improve financial well-being. Furthermore, the study reveals that the level of financial information partially mediates the relationship between financial literacy and financial well-being. This implies that while financial literacy directly enhances financial well-being, it also indirectly increases the level of financial information sought and utilized by individuals. The results emphasize financial literacy’s importance in promoting financial well-being, highlighting the need for comprehensive financial education programmes.