Determinants of the Demand for Financial Products in Ghana

This paper studies the determinants of financial product usage in Ghana. It uses secondary data from a financial inclusion survey by FinMark Trust. The survey captured responses and demographics of 3,643 individuals from Ghana to better understand the determinants of financial product usage in the Ghanaian environment. The study identifies financial literacy, educational level, income or expense stability, urban residence, access to electricity and communication channels, and local perception about product benefits as factors that determine whether a person will use a financial product. Recommendations include:

• Government and financial institutions should invest in financial education to increase understanding of the use, benefits, and risks of financial products;
• Financial institutions should design products in local languages;
• Financial institutions should customize products for those who have uneven cash flows;
• Central Bank should promote policies that ensure that financial institutions channel part of their services towards people in the informal sector who have volatile cash flows;
• Financial industry should make use of the extensive reach of cell phones, landlines, and internet to market and deliver financial products.