Effect of Mobile Banking on the Banking Behaviour of Informal Sector Workers in Accra, Ghana

Abstract

Improving financial inclusion of informal sector workers is a major concern for economic development. The emergence of mobile banking and its increasing acceptability and use do present an opportunity to improve banking behaviour among informal sector workers. This study estimates the effect of mobile banking service on the banking behaviour of informal sector workers in Accra, Ghana. A probit regression model was fitted to a survey data of 296 respondents. The result indicates that although the introduction of mobile banking service has a positive effect on mobile banking, less than half of the respondents have changed their banking behaviour as a result of the introduction of mobile banking service. The respondents also perceived that the introduction of mobile money service has not led to a significant change in ineffective saving methods. Other factors that significantly influenced the banking behaviour were sex, age and income of the respondents. It is concluded therefore that, mobile banking service can improve financial inclusion among informal sector workers. However, an effective remedy should be established to address the emerging risks associated with the use of mobile banking service and to improve its security features.Contribution/ Originality: This study contributes to existing literature by providing a quantitative estimation of the role of mobile banking in influencing banking behaviour among informal sector workers in Ghana. INTRODUCTIONThe understanding of the nexus between economic growth or economic development and a sound financial management system, has been established for decades now. This is not only limited to the developed economies but also to the developing countries like Ghana. However, there are a wide range of persons that are excluded from financial services due to unfavorable regulations and types of service. Financial inclusion has become a major consideration as the international community adopts the Sustainable Development Goals (SDGs). As defined by Kim (2016) financial inclusion as a situation where all working age persons have access to credit, savings, payments, and insurance from formal financial service providers. This means that financial exclusion arises when some persons do not have access to formal financial services. Financial inclusion is important for sustaining development and economic growth (Osikena & Uğur, 2016).According to Kim (2016) the objective of ensuring a financially inclusive society is to ensure that financial services

Financial Inclusion of the Elderly: Exploring the Role of Mobile Banking Adoption

“…Demographics also influence mobile banking adoption. Similarly, Azumah et al (2020) found gender, age and income as additional factors that significantly affect individuals' banking behaviour. The results of this study confirmed these findings indicating that men are more likely to adopt mobile banking.…”