Inclusive finance, bank pricing behaviour, and livelihood activities of households in Ghana

Abstract

This paper examines how bank pricing behaviour affects the relationship between financial inclusion and livelihood activities using a sample of households that covers many regions of Ghana. The empirical approach is conducted in two stages: first, we employ a biprobit model to explore the relationship between financial inclusion and individual livelihood activities. Second, we use two-stage least-squares and robust probit methods to assess the effect of inclusive finance on livelihood activities in the light of pricing behaviour of banks. Our results reveal that individual households who have a source of livelihood are motivated to have an account with a bank if they perceive the possibility of having higher income from their accounts. The results also suggest that individuals have a higher chance of earning more income when they are included financially by means of owning accounts, using their accounts to save, having access to credit, and making frequent withdrawals and payments using their accounts.

Prepaid debit cards and banking intention

“…, 2006; Freedman and Sekhon, 2010). Fiador and Amidu (2021) used a SUR biprobit to overcome endogeneity from sample selection bias in estimating Ghana's household bank account ownership and withdrawals. In our case, we estimate this joint decision model:where BIj∗ and PPj∗ are unobserved latent variables for banking intention and prepaid debit card use, respectively, and j refers to the j th individual.…”