Financial literacy, financial inclusion and participation of individual on the Ghana stock market

Figures & data

Table 1. Variables and their definitions

Variable	Definition	Measurement
Household Characteristics
Gender	Gender of respondent	1 = if male; 0 = otherwise
Age	Age range of respondent	Years
Marriage Status	Marital Status of respondents	1 = if married; 0 = otherwise
Urban	Place of residence (Urban or Rural)	1 = if urban; 0 = otherwise
HHSize	Number of people in the respondent’s household	Number of persons
Education	Educational status of the respondent	1 = if formally educated;0 = otherwise
Religion	Religion of respondent	1 = if Christian; 0 = otherwise
Financial Inclusion
ACCTO	Account ownership by the respondent	1 = if yes; 0 = otherwise
Saving	Usage of account for savings	1 = if yes; 0 = otherwise
Upmt	Usage of account for payments	1 = if yes; 0 = otherwise
FreqWith	Withdraws money at least once a month	1 = if yes; 0 = otherwise
Credit	Access to credit by Respondents	1 = if yes; 0 = otherwise
Financial Behaviour
CreditD	Dummy variable for ownership of credit card	1 = if yes; 0 = otherwise
SaIB	Good Savings and Investment behaviour of Respondent	1 = if yes; 0 = otherwise
Risk	Respondent is risk-averse	1 = if yes; 0 = otherwise
Financial Literacy (index score of how financial literacy a respondent is)
Stock value	Understanding Value/price of stock/shares	Correct answer = 1; wrong = 0
Future stock	Understanding the future value of the stock/shares	Correct answer = 1; wrong = 0
Simple interest	Understanding the simple interest	Correct answer = 1; wrong = 0
Amount	Understanding interest plus the principal	Correct answer = 1; wrong = 0
Risk and return	Relationship between return and risk	Correct answer = 1; wrong = 0
Inflation and cost of living	Relationship between inflation and cost of living	Correct answer = 1; wrong = 0
Risk diversification	Simple understanding of diversification and/or spreading of risk	Correct answer = 1; wrong = 0
	Financial Literacy index	Total score = 7
Stock Market Participation
InvStock	Having an investment in stocks	1 = if yes; 0 = otherwise
AgentTrade	Willing to buy or sell shares if agent visits	1 = if yes,0 = otherwise
StockConv	Prepared to buy or sell shares given the opportunity for conversion to cash	1 = if yes, 0 = otherwise

Table 2a. Summary of demographic statistics

	Freq.	Percent	Cum.
Gender
Female	722	36.89	36.89
Male	1235	63.11	100
Age
Between 16 and 18 years	164	8.37	8.37
Between 19 and 35 years	1137	58.04	66.41
Between 36 and 45 years	431	22	88.41
Between 46 and 60 years	182	9.29	97.7
Above 60 years	45	2.3	100
Marriage Status
Single	1125	57.22	57.22
Married	841	42.78	100
Urban
Rural	1165	59.56	59.56
Urban	791	40.44	100
Region
Greater Accra	282	14.38	14.38
Western	218	11.12	25.5
Eastern	205	10.45	35.95
Volta	106	5.41	41.36
Ashanti	93	4.74	46.1
Northern	254	12.95	59.05
Upper West	263	13.41	72.46
Upper East	386	19.68	92.15
Central	66	3.37	95.51
Brong Ahafo	88	4.49	100
Household Size
Less than 2	158	8.05	8.05
Between 3 and 4	607	30.94	38.99
Between 5 and 6	643	32.77	71.76
Between 7 and 8	284	14.48	86.24
Above 8	270	13.76	100
Education
None	101	5.18	5.18
Elementary	268	13.75	18.93
Secondary	594	30.48	49.41
Tertiary	961	49.31	98.72
Other	25	1.28	100
Employment Status
Unemployed	465	23.65	23.65
Employed	1501	76.35	100
Monthly Income
Less than GHC 8000	1523	80.8	80.8
Between GHC 8,000 and GHC10,000	217	11.51	92.31
Between GHC 11,000 and GHC15,000	89	4.72	97.03
Above GHC 15,000	56	2.97	100
Religion
Christianity	1363	75.55	75.55
Islam	387	21.45	97.01
Traditional	48	2.66	99.67
Other	6	0.33	100

Table 2b. Summary statistics on financial literacy index

FinLit	Freq.	Percent	Cum.
0	33	3.11	3.11
1	45	4.24	7.35
2	97	9.14	16.49
3	163	15.36	31.86
4	221	20.83	52.69
5	263	24.79	77.47
6	201	18.94	96.42
7	38	3.58	100

Table 2c. Frequency distribution of stock market participation variable

	Freq.	Percent	Cum.
Investment in stocks
No	1065	89.35	89.35
Yes	127	10.65	100
Agent Trade
No	719	54.59	54.59
Yes	598	45.41	100
Stock Conversion
No	531	42.89	42.89
Yes	707	57.11	100
Awareness of GSE
No	1193	66.95	66.95
Yes	589	33.05	100
Knowledge of stocks
No	746	65.21	65.21
Yes	398	34.79	100
Investment Objective
Short-term source of funds	1626	98.13	98.13
Future Wealth and Safety	24	1.45	99.58
Retirement Funds	5	0.3	99.88
Family	2	0.12	100
Monthly Income Used to Finance Investment
Below 10%	1097	67.55	67.55
10%-25%	375	23.09	90.64
26%-40%	91	5.6	96.24
41% and above	61	3.76	100
Saving and Investment Behaviour
Poor	498	29.33	29.33
Fair	603	35.51	64.84
Good	524	30.86	95.7
Very Good	73	4.3	100
Risk Aversion
High	211	12.91	12.91
Medium	731	44.71	57.61
Low	693	42.39	100

Table 3. The effect of financial literacy on financial inclusion

	Accto	Saving	Accto	Credit	Accto	Freqwith	Accto	Upmt
	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)
Finlit	0.143***	−0.00825	0.138***	−0.0257	0.133***	−0.0305	0.133***	0.00424
	(0.04)	(0.03)	(0.04)	(0.03)	(0.04)	(0.04)	(0.04)	(0.03)
Age	0.541	0.464	0.548	0.348	0.575	0.0880	0.617*	−0.234
	(0.36)	(0.31)	(0.36)	(0.29)	(0.36)	(0.32)	(0.36)	(0.30)
Age2	−0.0874	−0.0800	−0.0893	−0.0455	−0.0918	−0.00181	−0.0971	0.0262
	(0.06)	(0.05)	(0.06)	(0.04)	(0.063)	(0.05)	(0.06)	(0.05)
lnHHsize	−0.200	−0.0660	−0.151	−0.237*	−0.156	0.338**	−0.170	0.204
	(0.19)	(0.13)	(0.18)	(0.12)	(0.18)	(0.15)	(0.18)	(0.13)
Lnincome	0.124	0.108	0.0719	0.280	0.0586	0.283	0.0646	−0.0345
	(0.30)	(0.22)	(0.30)	(0.21)	(0.30)	(0.23)	(0.30)	(0.22)
Urban	0.00204	−0.257**	−0.0185	0.178	−0.00657	0.183	−0.00565	0.0651
	(0.15)	(0.113)	(0.15)	(0.11)	(0.15)	(0.12)	(0.15)	(0.12)
M. Status	0.0327	0.0828	0.0226	0.617***	0.00819	0.161	−0.0160	0.137
	(0.18)	(0.130)	(0.18)	(0.13)	(0.18)	(0.15)	(0.18)	(0.14)
E.Status	0.0895	0.328**	0.112	−0.197	0.117	−0.210	0.113	0.00134
	(0.19)	(0.15)	(0.19)	(0.14)	(0.19)	(0.16)	(0.19)	(0.15)
Gender	0.139	−0.113	0.157	0.331***	0.158	0.332***	0.154	0.189*
	(0.14)	(0.10)	(0.14)	(0.10)	(0.14)	(0.12)	(0.14)	(0.11)
Education	0.312	0.546	0.00818	0.546	0.0581	0.0611	0.0708	−0.168
	(0.57)	(0.554)	(0.66)	(0.58)	(0.65)	(0.63)	(0.65)	(0.60)
Christian	0.244	0.260	0.190	0.0134	0.202	0.153	0.200	0.245
	(0.22)	(0.176)	(0.23)	(0.17)	(0.23)	(0.20)	(0.23)	(0.18)
Saib		0.224***		0.211***		0.0753		0.217***
		(0.0577)		(0.0580)		(0.066)		(0.061)
Risk		0.0753		−0.142*		−0.0419		−0.137*
		(0.0765)		(0.075)		(0.087)		(0.080)
Credit Card						0.268**		0.550***
						(0.12)		(0.11)
GreaterAccra	0.114	0.195	0.107	0.218	0.116	0.353*	0.119	0.265
	(0.26)	(0.17)	(0.26)	(0.17)	(0.26)	(0.20)	(0.26)	(0.17)
Western	−0.0715	0.139	−0.0933	0.416**	−0.102	0.274	−0.109	−0.115
	(0.30)	(0.20)	(0.30)	(0.20)	(0.30)	(0.24)	(0.30)	(0.21)
Eastern	−0.510**	−0.153	−0.531**	0.581***	−0.531**	0.396*	−0.535**	−0.125
	(0.25)	(0.19)	(0.25)	(0.19)	(0.25)	(0.22)	(0.25)	(0.20)
Volta	−0.729***	0.193	−0.649**	0.458**	−0.664**	0.326	−0.657**	−0.243
	(0.28)	(0.21)	(0.28)	(0.21)	(0.28)	(0.25)	(0.28)	(0.23)
Ashanti	−0.242	0.180	−0.225	0.216	−0.242	−0.0710	−0.236	0.123
	(0.29)	(0.21)	(0.29)	(0.21)	(0.29)	(0.25)	(0.29)	(0.21)
Northern	4.532	1.041	3.908	0.249	3.677	−4.057	4.049	6.591
	(2080.0)	(0.84)	(559.3)	(0.79)	(327.2)	(517.5)	(834.3)	(844.3)
Upper West	−0.167	−0.180	−0.212	0.124	−0.178	0.288	−0.162	−0.0336
	(0.31)	(0.23)	(0.31)	(0.23)	(0.31)	(0.26)	(0.31)	(0.24)
Upper East	0.211	0.260	0.237	0.375	0.229	0.230	0.249	−0.327
	(0.408)	(0.25)	(0.409)	(0.25)	(0.406)	(0.29)	(0.407)	(0.27)
Constant	−1.390	−3.539*	−0.622	−4.339**	−0.589	−4.745**	−0.689	−0.784
	(2.87)	(2.13)	(2.86)	(2.13)	(2.87)	(2.30)	(2.87)	(2.17)
Observation	766	766	766	766	766	766	766	766
Chi2	82.64	82.64	125.11	125.11	74.81	74.81	101.51	101.51
P	0.000	0.000	0.000	0.000	0.001	0.001	0.000	0.000

Financial inclusion indicators which are account ownership (accto), saving using an account (saving), access to bank credit (credits), frequency of withdrawal (freqwith) and usage of account to make payment (upmt) are regressed against financial literacy (Finlit), household characteristics (Age, Age², Hhsize, Income, Urban, Employment status, Marriage status, and Religion), financial behaviour(Saving and Investment behaviour, Credit Card, Risk) and the region of residence (Greater Accra, Western, Eastern, Upper East, Upper West, Northern, Volta, Ashanti). Financial inclusion is the dependent variable whereas financial literacy, household characteristics and financial behaviour are independent variables. A biprobit is employed to examine the relationship between the variables specified below. This model also helps to overcome the problem of self-selection and the problem of endogeneity that is often associated with self-selection. Standard errors are displayed in parentheses. ***, **, and * indicate statistical significance at 1%, 5% and 10% level respectively. The diagnostic tests reported are: (1) Observations, (2) Chi-square, (3) P-value.

Table 4. The impact of financial literacy on stock market participation

	(1)	(2)	(3)
	InvStock	AgentTrade	StockConv
Finlit	0.196	−0.0849	−0.238*
	(0.182)	(0.128)	(0.136)
Age	0.0775	−0.560*	−0.527*
	(0.433)	(0.288)	(0.300)
age2	0.0172	0.0737	0.0650
	(0.0730)	(0.0501)	(0.0527)
lnHHsize	−0.0845	0.110	0.00913
	(0.177)	(0.122)	(0.123)
Lnincome	−0.326	0.554**	−0.472*
	(0.317)	(0.252)	(0.257)
Urban	−0.208	0.162	0.0320
	(0.164)	(0.107)	(0.109)
Marriage Status	−0.0248	0.206*	0.112
	(0.182)	(0.121)	(0.123)
Emp. Status	0.217	−0.0506	−0.146
	(0.222)	(0.132)	(0.134)
Gender	−0.0854	0.215**	−0.0646
	(0.164)	(0.104)	(0.107)
Education	−0.442	−0.370	−0.0616
	(0.451)	(0.409)	(0.401)
Christian	0.171	0.0318	0.133
	(0.216)	(0.127)	(0.125)
Greater Accra	0.453	−0.236	0.0855
	(0.334)	(0.205)	(0.229)
Western	0.826**	−0.235	−0.428*
	(0.349)	(0.242)	(0.238)
Eastern	0.324	−0.0690	0.0182
	(0.362)	(0.186)	(0.199)
Volta	0.445	0.198	0.527*
	(0.381)	(0.254)	(0.269)
Ashanti	−0.430	−0.116	0.685***
	(0.471)	(0.248)	(0.254)
Brong Ahafo	0.689	−0.278	0.233
	(0.462)	(0.306)	(0.294)
Central	0.742*	−0.113	−0.0269
	(0.408)	(0.270)	(0.300)
Upper West	0.616**	−0.0441	−0.117
	(0.285)	(0.174)	(0.173)
Risk and return	0.943***	0.838***	0.687***
	(0.171)	(0.113)	(0.113)
Knowl. of stock	1.178***	−0.351***	0.0345
	(0.171)	(0.125)	(0.127)
GSE Awareness	0.0178	0.414***	0.529***
	(0.199)	(0.125)	(0.127)
Inv. Financing	0.0977	0.0261	−0.0848
	(0.101)	(0.0762)	(0.0831)
Inv. Objective	0.0239	0.585	1.105**
	(0.483)	(0.590)	(0.490)
Saving and Inv.	0.0485	−0.0434	0.00171
	(0.0926)	(0.0592)	(0.0615)
Risk averse	0.454**	0.0542	−0.115
	(0.193)	(0.116)	(0.122)
Constant	−0.372	−5.067**	4.026*
	(2.967)	(2.399)	(2.410)
Observation	756	733	712
Chi2	133.075	110.330	92.432
P-values	0.000	0.000	0.000

The table shows the results of the relationship between financial literacy and stock market participation using robust probit regression. The variables used to measure participation are Investment in stock (InvStock), willingness to buy sell shares when an agent visits (AgentTrade) and willingness to buy or sell share given the opportunity to convert shares to cash (StockConv). These variables are regressed against financial literacy (Finlit), household characteristics (Age, Age2, Hhsize, Income, Urban, Employment status, Marriage status, and Religion), region of residence (Greater Accra, Western, Eastern, Upper East, Upper West, Northern, Volta, Ashanti) and financial behaviour (Saving and Investment behaviour, Investment Objective, Percentage of Monthly income used for investment and Risk Aversion).The parentheses show robust standard errors resulting from the analysis. ***, **, and * show statistical significance at 1%, 5% and 10% level respectively. The diagnostic tests reported are (1) Observations (2) Chi-square and (3) P-values

Table 5a. The influence of financial inclusion on stock market participation (investment in stocks)

	(1)	(2)	(3)	(4)	(5)
	InvStock	InvStock	InvStock	InvStock	InvStock
Accto	−0.158
	(0.290)
Saving		−0.487***
		(0.156)
Freqwith			−0.113
			(0.193)
Upmt				0.0183
				(0.151)
Credits					−0.0143
					(0.161)
Age	0.0769	0.119	0.0905	0.0819	0.0805
	(0.434)	(0.442)	(0.433)	(0.435)	(0.436)
Age2	0.0170	0.0126	0.0156	0.0164	0.0167
	(0.0737)	(0.0741)	(0.0729)	(0.0736)	(0.0737)
lnHHsize	−0.0769	−0.0834	−0.0665	−0.0752	−0.0743
	(0.176)	(0.179)	(0.176)	(0.174)	(0.176)
lnincome	−0.344	−0.301	−0.331	−0.341	−0.341
	(0.315)	(0.319)	(0.316)	(0.314)	(0.314)
Urban	−0.217	−0.242	−0.218	−0.225	−0.223
	(0.166)	(0.163)	(0.165)	(0.167)	(0.165)
Marriage status	−0.0254	−0.00867	−0.0292	−0.0355	−0.0298
	(0.179)	(0.181)	(0.181)	(0.179)	(0.184)
Emp. status	0.248	0.311	0.218	0.240	0.239
	(0.223)	(0.223)	(0.219)	(0.219)	(0.220)
Gender	−0.0709	−0.0622	−0.0635	−0.0700	−0.0700
	(0.166)	(0.167)	(0.167)	(0.165)	(0.165)
Education	−0.369	−0.211	−0.391	−0.418	−0.409
	(0.451)	(0.452)	(0.460)	(0.458)	(0.455)
Christian	0.194	0.248	0.203	0.195	0.196
	(0.218)	(0.219)	(0.218)	(0.217)	(0.216)
Greater Accra	0.539*	0.482	0.505	0.519*	0.519*
	(0.316)	(0.316)	(0.313)	(0.309)	(0.311)
Western	0.899***	0.848**	0.874***	0.889***	0.887***
	(0.336)	(0.330)	(0.332)	(0.333)	(0.330)
Eastern	0.400	0.347	0.382	0.391	0.393
	(0.341)	(0.339)	(0.339)	(0.338)	(0.334)
Volta	0.540	0.443	0.508	0.528	0.528
	(0.358)	(0.358)	(0.356)	(0.354)	(0.352)
Ashanti	−0.340	−0.478	−0.364	−0.347	−0.348
	(0.455)	(0.456)	(0.460)	(0.451)	(0.456)
Brong Ahafo	0.803*	0.700	0.785*	0.798*	0.796*
	(0.432)	(0.446)	(0.431)	(0.432)	(0.436)
Central	0.753*	0.716*	0.695*	0.730*	0.726*
	(0.421)	(0.431)	(0.418)	(0.413)	(0.412)
Upper West	0.652**	0.595**	0.620**	0.632**	0.630**
	(0.291)	(0.283)	(0.282)	(0.281)	(0.282)
Risk and return	0.936***	0.968***	0.930***	0.930***	0.932***
	(0.172)	(0.171)	(0.172)	(0.172)	(0.172)
Knowledge of stock	1.199***	1.228***	1.199***	1.197***	1.197***
	(0.168)	(0.172)	(0.169)	(0.168)	(0.169)
GSE Aware	0.0927	0.0710	0.0905	0.0789	0.0780
	(0.209)	(0.213)	(0.212)	(0.211)	(0.210)
Inv. Financing	0.0923	0.0804	0.0930	0.0886	0.0892
	(0.0987)	(0.101)	(0.0993)	(0.0995)	(0.0997)
Inv. objective	0.0138	0.148	−0.0128	−0.0150	−0.0131
	(0.482)	(0.479)	(0.470)	(0.480)	(0.482)
Saving and Inv.	0.0508	0.106	0.0515	0.0485	0.0507
	(0.0935)	(0.0932)	(0.0929)	(0.0936)	(0.0936)
Risk Averse	0.461**	0.498**	0.466**	0.452**	0.455**
	(0.197)	(0.201)	(0.196)	(0.195)	(0.197)
Constant	−0.195	−1.127	−0.377	−0.247	−0.252
	(2.967)	(2.999)	(2.974)	(2.954)	(2.956)
Observation	756	756	756	756	756
Chi2	129.970	150.085	132.066	128.623	129.981
P-values	0.000	0.000	0.000	0.000	0.000

Financial inclusion indicators which are account ownership (accto), saving using an account (saving), access to bank credit (credits), frequency of withdrawal (freqwith) and usage of account to make payment (upmt) together with household characteristics (Age, Age2, Hhsize, Income, Urban, Employment status, Marriage status, and Religion), financial behaviour(Saving and Investment behaviour, Credit Card, Risk) and the region of residence (Greater Accra, Western, Eastern, Central, Brong Ahafo, Upper West, Volta, Ashanti) are regressed against the stock market participation indicator; investment in stocks (InvStock). InvStock is the dependent variables whereas financial inclusion indicators, household characteristics and financial behaviour are independent variables. A robust probit is employed to examine the relationship between the specified variables. Standard errors which are robust are reported in parentheses. ***, **, and * represent statistical significance at 1%, 5% and 10% level respectively. The diagnostic tests reported are: (1) Observations (2) Chi-square (3) P-values

Table 5b. The influence of financial inclusion on stock market participation (participation motivated by agent visit)

	(1)	(2)	(3)	(4)	(5)
	AgentTrade	AgentTrade	AgentTrade	AgentTrade	AgentTrade
Accto	0.0249
	(0.149)
Saving		0.0861
		(0.108)
Freqwith			0.141
			(0.138)
Upmt				0.0462
				(0.110)
Credits					0.0793
					(0.105)
Age	−0.564**	−0.575**	−0.573**	−0.563**	−0.563**
	(0.287)	(0.289)	(0.287)	(0.287)	(0.287)
Age2	0.0744	0.0758	0.0752	0.0742	0.0733
	(0.0501)	(0.0503)	(0.0501)	(0.0500)	(0.0500)
lnHHsize	0.101	0.0998	0.0919	0.101	0.104
	(0.121)	(0.121)	(0.121)	(0.121)	(0.121)
Lnincome	0.565**	0.570**	0.544**	0.572**	0.563**
	(0.250)	(0.251)	(0.253)	(0.251)	(0.251)
Urban	0.166	0.170	0.158	0.162	0.158
	(0.107)	(0.107)	(0.107)	(0.107)	(0.107)
Marriage status	0.205*	0.204*	0.208*	0.201*	0.191
	(0.121)	(0.121)	(0.121)	(0.121)	(0.122)
Emp. status	−0.0601	−0.0734	−0.0483	−0.0611	−0.0663
	(0.132)	(0.133)	(0.132)	(0.131)	(0.132)
Gender	0.208**	0.210**	0.200*	0.207**	0.202*
	(0.104)	(0.104)	(0.104)	(0.104)	(0.104)
Education	−0.385	−0.410	−0.389	−0.385	−0.379
	(0.407)	(0.412)	(0.408)	(0.408)	(0.410)
Christian	0.0258	0.0195	0.0138	0.0240	0.0241
	(0.127)	(0.127)	(0.127)	(0.127)	(0.127)
Greater Accra	−0.278	−0.270	−0.263	−0.278	−0.270
	(0.198)	(0.197)	(0.198)	(0.197)	(0.197)
Western	−0.268	−0.259	−0.258	−0.260	−0.268
	(0.237)	(0.238)	(0.238)	(0.238)	(0.237)
Eastern	−0.104	−0.0939	−0.0917	−0.105	−0.105
	(0.179)	(0.179)	(0.180)	(0.179)	(0.179)
Volta	0.157	0.165	0.178	0.161	0.166
	(0.245)	(0.244)	(0.245)	(0.245)	(0.246)
Ashanti	−0.162	−0.152	−0.138	−0.160	−0.153
	(0.236)	(0.237)	(0.237)	(0.236)	(0.236)
Brong Ahafo	−0.330	−0.315	−0.312	−0.329	−0.312
	(0.294)	(0.296)	(0.296)	(0.294)	(0.295)
Central	−0.125	−0.119	−0.0855	−0.118	−0.112
	(0.268)	(0.269)	(0.271)	(0.268)	(0.268)
Upper West	−0.0598	−0.0481	−0.0538	−0.0559	−0.0485
	(0.172)	(0.172)	(0.171)	(0.172)	(0.173)
Risk and return	0.841***	0.841***	0.841***	0.834***	0.838***
	(0.113)	(0.113)	(0.113)	(0.114)	(0.113)
Knowl. of stock	−0.357***	−0.360***	−0.357***	−0.361***	−0.356***
	(0.125)	(0.125)	(0.125)	(0.125)	(0.125)
GSE Awareness	0.395***	0.398***	0.386***	0.396***	0.398***
	(0.124)	(0.123)	(0.124)	(0.123)	(0.123)
Inv. Financing	0.0263	0.0263	0.0261	0.0266	0.0284
	(0.0761)	(0.0758)	(0.0762)	(0.0761)	(0.0760)
Inv. objective	0.590	0.581	0.569	0.596	0.593
	(0.596)	(0.588)	(0.595)	(0.588)	(0.584)
Saving and Inv.	−0.0418	−0.0502	−0.0429	−0.0431	−0.0475
	(0.0595)	(0.0605)	(0.0593)	(0.0592)	(0.0599)
Risk averse	0.0496	0.0459	0.0404	0.0485	0.0427
	(0.117)	(0.116)	(0.116)	(0.116)	(0.117)
Constant	−5.153**	−5.130**	−4.907**	−5.206**	−5.133**
	(2.388)	(2.391)	(2.411)	(2.389)	(2.390)
Observation	733	733	733	733	733
chi2	107.675	108.282	109.447	107.707	107.570
P-values	0.000	0.000	0.000	0.000	0.000

Financial inclusion indicators which are account ownership (accto), saving using an account (saving), access to bank credit (credits), frequency of withdrawal (freqwith and usage of account to make payment (upmt), household characteristics (Age, Age2, Hhsize, Income, Urban, Employment status, Marriage status, and Religion), financial behaviour(Saving and Investment behaviour, Credit Card, Risk) and the region of residence (Greater Accra, Western, Eastern, Central, Brong Ahafo, Upper West, Volta, Ashanti) are regressed against the stock market participation indicator; willingness to buy or sell shares when an agent visits (AgentTrade). AgentTrade is the dependent variables whereas financial inclusion indicators, household characteristics and financial behaviour are independent variables. A robust probit is employed to examine the relationship between the specified variables. Robust standard errors are displayed in parentheses. Statistical significance at 1%, 5% and 10% level are indicated by ***, **, and * respectively. The diagnostic tests reported are: (1) Observations (2) Chi-square (3) P-values

Table 5c. The effect of financial inclusion on stock market participation (participation motivated by stock conversion to cash)

	(1)	(2)	(3)	(4)	(5)
	StockConv	StockConv	StockConv	StockConv	StockConv
Accto	−0.0226
	(0.155)
Saving		−0.0187
		(0.111)
Freqwith			0.200
			(0.143)
Upmt				0.0980
				(0.114)
Credits					0.0406
					(0.109)
Age	−0.532*	−0.530*	−0.547*	−0.527*	−0.532*
	(0.297)	(0.297)	(0.297)	(0.296)	(0.297)
age2	0.0655	0.0655	0.0679	0.0650	0.0652
	(0.0519)	(0.0519)	(0.0519)	(0.0517)	(0.0519)
lnHHsize	−0.0161	−0.0152	−0.0289	−0.0128	−0.0133
	(0.122)	(0.122)	(0.122)	(0.122)	(0.122)
Lnincome	−0.432*	−0.433*	−0.474*	−0.421	−0.436*
	(0.256)	(0.256)	(0.258)	(0.256)	(0.256)
Urban	0.0450	0.0437	0.0340	0.0353	0.0420
	(0.108)	(0.109)	(0.108)	(0.109)	(0.109)
Marriage status	0.119	0.119	0.118	0.108	0.112
	(0.123)	(0.123)	(0.123)	(0.123)	(0.124)
Emp. Status	−0.168	−0.167	−0.156	−0.174	−0.175
	(0.135)	(0.135)	(0.134)	(0.134)	(0.135)
Gender	−0.0748	−0.0758	−0.0900	−0.0822	−0.0783
	(0.107)	(0.107)	(0.107)	(0.107)	(0.107)
Education	−0.0663	−0.0647	−0.0838	−0.0819	−0.0720
	(0.394)	(0.393)	(0.394)	(0.396)	(0.392)
Christian	0.112	0.114	0.0941	0.110	0.112
	(0.125)	(0.125)	(0.125)	(0.125)	(0.125)
Greater Accra	−0.00830	−0.0136	0.00610	−0.0152	−0.00872
	(0.214)	(0.214)	(0.215)	(0.214)	(0.214)
Western	−0.507**	−0.511**	−0.486**	−0.493**	−0.506**
	(0.233)	(0.234)	(0.235)	(0.234)	(0.233)
Eastern	−0.0762	−0.0794	−0.0633	−0.0816	−0.0770
	(0.189)	(0.190)	(0.191)	(0.189)	(0.189)
Volta	0.412	0.410	0.446*	0.418	0.418
	(0.261)	(0.261)	(0.262)	(0.262)	(0.262)
Ashanti	0.556**	0.553**	0.591**	0.556**	0.560**
	(0.241)	(0.241)	(0.242)	(0.239)	(0.240)
Brong Ahafo	0.0905	0.0858	0.116	0.0883	0.0964
	(0.282)	(0.282)	(0.279)	(0.280)	(0.282)
Central	−0.0542	−0.0580	−0.00132	−0.0458	−0.0517
	(0.291)	(0.291)	(0.294)	(0.291)	(0.293)
Upper West	−0.148	−0.153	−0.145	−0.148	−0.146
	(0.172)	(0.172)	(0.171)	(0.172)	(0.173)
Risk and return	0.697***	0.698***	0.697***	0.684***	0.695***
	(0.113)	(0.113)	(0.113)	(0.115)	(0.113)
Knowl. of stock	0.0125	0.0134	0.0124	0.00282	0.0125
	(0.126)	(0.126)	(0.126)	(0.126)	(0.126)
GSE Awareness	0.482***	0.482***	0.463***	0.480***	0.482***
	(0.124)	(0.124)	(0.124)	(0.124)	(0.124)
Inv. financing	−0.0823	−0.0828	−0.0856	−0.0837	−0.0829
	(0.0831)	(0.0828)	(0.0832)	(0.0830)	(0.0830)
Inv. Objective	1.154**	1.155**	1.133**	1.138**	1.142**
	(0.489)	(0.486)	(0.493)	(0.481)	(0.485)
Saving and Inv.	0.00851	0.00980	0.00515	0.00349	0.00457
	(0.0615)	(0.0622)	(0.0613)	(0.0617)	(0.0621)
Risk averse	−0.121	−0.121	−0.135	−0.129	−0.127
	(0.122)	(0.122)	(0.123)	(0.122)	(0.123)
Constant	3.671	3.661	4.104*	3.591	3.717
	(2.397)	(2.397)	(2.415)	(2.393)	(2.395)
Observation	712	712	712	712	712
Chi2	89.737	89.656	89.729	91.892	89.873
P-values	0.000	0.000	0.000	0.000	0.000

Financial inclusion indicators which are account ownership (accto), saving using an account (saving), access to bank credit (credits), frequency of withdrawal (freqwith and usage of account to make payment (upmt), household characteristics (Age, Age2, Hhsize, Income, Urban, Employment status, Marriage status, and Religion), financial behaviour(Saving and Investment behaviour, Credit Card, Risk) and the region of residence (Greater Accra, Western, Eastern, Central, Brong Ahafo, Upper West, Volta, Ashanti) are regressed against the stock market participation indicator; preparedness to buy or sell shares given the opportunity to convert shares to cash (StockConv).StockConv is the dependent variables whereas financial inclusion indicators, household characteristics and financial behaviour are independent variables. A robust probit is employed to examine the relationship between the specified variables. Robust standard errors are shown in parentheses. ***, **, and * indicate statistical significance at 1%, 5% and 10% level respectively. The diagnostic tests reported are: (1) Observations (2) Chi-square (3) P-values

Table 6a. The effect of financial literacy and financial inclusion on stock market participation (investment in stock)

	(1)	(2)	(3)	(4)	(5)
	InvStock	InvStock	InvStock	InvStock	InvStock
Fld*Accto	0.173
	(0.184)
Fld*Saving		−0.247
		(0.210)
Fld*Freqwith			−0.0357
			(0.240)
Fld*Upmt				0.132
				(0.190)
Fld*Credits					0.00915
					(0.188)
Age	0.0814	0.0812	0.0832	0.0707	0.0806
	(0.433)	(0.440)	(0.435)	(0.434)	(0.436)
Age2	0.0165	0.0163	0.0161	0.0182	0.0165
	(0.0731)	(0.0743)	(0.0736)	(0.0736)	(0.0737)
LnHHsize	−0.0810	−0.0734	−0.0726	−0.0877	−0.0732
	(0.176)	(0.175)	(0.175)	(0.175)	(0.175)
LnIncome	−0.333	−0.324	−0.339	−0.345	−0.341
	(0.317)	(0.314)	(0.314)	(0.315)	(0.315)
Urban	−0.213	−0.243	−0.222	−0.221	−0.223
	(0.165)	(0.163)	(0.165)	(0.165)	(0.164)
Marriage status	−0.0307	−0.0219	−0.0315	−0.0409	−0.0341
	(0.182)	(0.179)	(0.180)	(0.179)	(0.181)
Emp. status	0.219	0.262	0.237	0.235	0.240
	(0.221)	(0.218)	(0.217)	(0.219)	(0.220)
Gender	−0.0819	−0.0523	−0.0669	−0.0781	−0.0710
	(0.165)	(0.164)	(0.165)	(0.165)	(0.163)
Education	−0.435	−0.391	−0.412	−0.426	−0.414
	(0.453)	(0.454)	(0.457)	(0.456)	(0.455)
Christian	0.177	0.218	0.198	0.189	0.196
	(0.215)	(0.218)	(0.217)	(0.216)	(0.217)
Greater Accra	0.462	0.566*	0.520*	0.490	0.519*
	(0.334)	(0.314)	(0.309)	(0.316)	(0.313)
Western	0.835**	0.918***	0.888***	0.879***	0.885***
	(0.348)	(0.331)	(0.331)	(0.333)	(0.335)
Eastern	0.340	0.427	0.396	0.377	0.389
	(0.355)	(0.341)	(0.339)	(0.337)	(0.343)
Volta	0.460	0.542	0.528	0.506	0.525
	(0.376)	(0.355)	(0.354)	(0.354)	(0.362)
Ashanti	−0.407	−0.354	−0.346	−0.380	−0.347
	(0.463)	(0.454)	(0.453)	(0.446)	(0.452)
Brong Ahafo	0.721	0.823*	0.800*	0.766*	0.795*
	(0.474)	(0.439)	(0.432)	(0.440)	(0.433)
Central	0.738*	0.728*	0.721*	0.733*	0.726*
	(0.409)	(0.412)	(0.412)	(0.412)	(0.412)
Upper West	0.621**	0.620**	0.630**	0.632**	0.631**
	(0.283)	(0.280)	(0.281)	(0.282)	(0.281)
Risk and return	0.940***	0.944***	0.930***	0.930***	0.932***
	(0.171)	(0.172)	(0.172)	(0.171)	(0.172)
Knowl. of stock	1.177***	1.208***	1.201***	1.181***	1.197***
	(0.171)	(0.171)	(0.169)	(0.170)	(0.172)
GSE Aware	0.0281	0.100	0.0807	0.0689	0.0777
	(0.204)	(0.212)	(0.211)	(0.212)	(0.210)
Inv. financing	0.0943	0.0837	0.0886	0.0876	0.0889
	(0.100)	(0.0993)	(0.0996)	(0.100)	(0.0996)
Inv. objective	0.00967	0.0483	−0.0169	−0.0124	−0.0119
	(0.485)	(0.480)	(0.479)	(0.472)	(0.480)
Saving and Inv.	0.0495	0.0609	0.0504	0.0418	0.0493
	(0.0927)	(0.0917)	(0.0933)	(0.0924)	(0.0925)
Risk averse	0.453**	0.454**	0.455**	0.444**	0.453**
	(0.192)	(0.195)	(0.193)	(0.193)	(0.194)
Constant	−0.306	−0.554	−0.276	−0.129	−0.253
	(2.963)	(2.944)	(2.957)	(2.957)	(2.958)
Observation	756	756	756	756	756
Chi2	131.918	131.493	129.060	129.338	129.165
P-values	0.000	0.000	0.000	0.000	0.000

The table presents the interaction of financial literacy and financial inclusion on stock market participation. Financial inclusion indicators which are account ownership (accto), saving using an account (saving), access to bank credit (credits), frequency of withdrawal (freqwith) and usage of account to make payment (upmt), financial literacy, household characteristics (Age, Age2, Hhsize, Income, Urban, Employment status, Marriage status, and Religion), financial behaviour (Saving and Investment behaviour, Risk aversion, Investment Objective, Investment Financing) and the region of residence (Greater Accra, Western, Eastern, Central, Brong Ahafo, Upper West, Volta, Ashanti) are regressed against the stock market participation indicator; Investment in stock (InvStock). InvStock is the dependent variables whereas financial literacy, financial inclusion indicators, household characteristics and financial behaviour are independent variables. InvStock is the dependent variables whereas financial literacy, financial inclusion indicators, household characteristics and financial behaviour are independent variables. A robust probit is employed to examine the relationship between the variables specified. Robust standard errors are reported in parentheses. ***, **, and * indicate statistical significance at 1%, 5% and 10% level respectively. The diagnostic tests reported are: (1) Observations (2) Chi-square (3) P-values

Table 6b. The effect of financial literacy and financial inclusion on stock market participation (participation motivated by agent Visit)

	(1)	(2)	(3)	(4)	(5)
	AgentTrade	AgentTrade	AgentTrade	AgentTrade	AgentTrade
Fld*Accto	−0.0824
	(0.124)
Fld*Saving		0.162
		(0.161)
Fld*Freqwith			−0.0309
			(0.200)
Fld*Upmt				0.00589
				(0.158)
Fld*Credits					0.221
					(0.150)
Age	−0.560*	−0.570**	−0.561*	−0.563**	−0.562*
	(0.287)	(0.288)	(0.287)	(0.287)	(0.288)
Age2	0.0739	0.0752	0.0738	0.0742	0.0726
	(0.0501)	(0.0502)	(0.0500)	(0.0500)	(0.0500)
LnHHsize	0.108	0.100	0.102	0.101	0.104
	(0.122)	(0.122)	(0.121)	(0.121)	(0.121)
LnIncome	0.555**	0.568**	0.567**	0.566**	0.577**
	(0.252)	(0.251)	(0.250)	(0.251)	(0.252)
Urban	0.162	0.177*	0.167	0.166	0.159
	(0.107)	(0.107)	(0.107)	(0.107)	(0.107)
Marriage status	0.206*	0.201*	0.207*	0.206*	0.179
	(0.121)	(0.121)	(0.121)	(0.121)	(0.121)
Emp. status	−0.0513	−0.0658	−0.0578	−0.0577	−0.0602
	(0.132)	(0.131)	(0.131)	(0.131)	(0.132)
Gender	0.214**	0.202*	0.211**	0.209**	0.186*
	(0.104)	(0.104)	(0.104)	(0.104)	(0.104)
Education	−0.371	−0.385	−0.376	−0.377	−0.379
	(0.409)	(0.408)	(0.407)	(0.408)	(0.406)
Christian	0.0300	0.0175	0.0267	0.0255	0.0214
	(0.127)	(0.127)	(0.127)	(0.127)	(0.127)
Greater Accra	−0.238	−0.308	−0.274	−0.276	−0.324
	(0.204)	(0.202)	(0.197)	(0.201)	(0.202)
Western	−0.238	−0.286	−0.263	−0.267	−0.321
	(0.240)	(0.240)	(0.235)	(0.237)	(0.240)
Eastern	−0.0764	−0.126	−0.100	−0.104	−0.167
	(0.184)	(0.182)	(0.180)	(0.180)	(0.184)
Volta	0.191	0.137	0.159	0.157	0.0955
	(0.250)	(0.247)	(0.246)	(0.246)	(0.252)
Ashanti	−0.122	−0.189	−0.160	−0.162	−0.214
	(0.246)	(0.239)	(0.236)	(0.238)	(0.238)
Brong Ahafo	−0.286	−0.362	−0.326	−0.330	−0.394
	(0.302)	(0.300)	(0.294)	(0.297)	(0.300)
Central	−0.113	−0.133	−0.124	−0.122	−0.137
	(0.270)	(0.270)	(0.268)	(0.268)	(0.268)
Upper West	−0.0459	−0.0572	−0.0572	−0.0568	−0.0599
	(0.173)	(0.172)	(0.171)	(0.171)	(0.172)
Risk and return	0.838***	0.839***	0.841***	0.841***	0.846***
	(0.113)	(0.113)	(0.113)	(0.113)	(0.114)
Knowl. of stock	−0.350***	−0.361***	−0.356***	−0.358***	−0.375***
	(0.125)	(0.125)	(0.126)	(0.126)	(0.126)
GSE Awareness	0.412***	0.383***	0.397***	0.396***	0.378***
	(0.124)	(0.124)	(0.123)	(0.123)	(0.123)
Inv. financing	0.0274	0.0262	0.0267	0.0270	0.0327
	(0.0762)	(0.0758)	(0.0760)	(0.0760)	(0.0759)
Inv. Objective	0.594	0.570	0.598	0.596	0.609
	(0.589)	(0.593)	(0.594)	(0.594)	(0.589)
Saving and Inv.	−0.0431	−0.0446	−0.0406	−0.0411	−0.0460
	(0.0591)	(0.0592)	(0.0591)	(0.0591)	(0.0593)
Risk Averse	0.0558	0.0513	0.0523	0.0514	0.0421
	(0.116)	(0.116)	(0.116)	(0.116)	(0.116)
Constant	−5.082**	−5.112**	−5.180**	−5.158**	−5.225**
	(2.397)	(2.389)	(2.389)	(2.389)	(2.400)
Observation	733	733	733	733	733
Chi2	110.345	106.991	108.029	108.085	105.518
P-values	0.000	0.000	0.000	0.000	0.000

The table presents the interaction of financial literacy and financial inclusion on stock market participation. Financial inclusion indicators which are account ownership (accto), saving using an account (saving), access to bank credit (credits), frequency of withdrawal (freqwith) and usage of account to make payment (upmt), financial literacy, household characteristics (Age, Age2, Hhsize, Income, Urban, Employment status, Marriage status, and Religion), financial behaviour(Saving and Investment behaviour, Risk aversion, Investment Objective, Investment Financing) and the region of residence (Greater Accra, Western, Eastern, Central, Brong Ahafo, Upper West, Volta, Ashanti) are regressed against the stock market participation indicator; willingness to buy or sell shares when an agent visits (AgentTrade). AgentTrade is the dependent variables whereas financial literacy, financial inclusion indicators, household characteristics and financial behaviour are independent variables. InvStock is the dependent variables whereas financial literacy, financial inclusion indicators, household characteristics and financial behaviour are independent variables. A robust probit is employed to examine the relationship between the variables specified. Robust standard errors are reported in parentheses, ***, **, and * indicate statistical significance at 1%, 5% and 10% level respectively. The diagnostic tests reported are: (1) Observations (2) Chi-square (3) P-values

Table 6c. The effect of financial literacy and financial inclusion on stock market participation (participation motivated by stock conversion)

	(1)	(2)	(3)	(4)	(5)
	StockConv	StockConv	StockConv	StockConv	StockConv
Fld*Accto	−0.185
	(0.134)
Fld*Saving		−0.155
		(0.168)
Fld*Freqwith			−0.0892
			(0.205)
Fld*Upmt				−0.0729
				(0.167)
Fld*Credits					0.213
					(0.156)
Age	−0.526*	−0.528*	−0.528*	−0.533*	−0.529*
	(0.298)	(0.297)	(0.297)	(0.297)	(0.296)
Age2	0.0650	0.0649	0.0649	0.0659	0.0632
	(0.0524)	(0.0520)	(0.0519)	(0.0520)	(0.0517)
LnHHsize	0.00130	−0.0143	−0.0133	−0.0133	−0.0112
	(0.123)	(0.122)	(0.122)	(0.122)	(0.122)
LnIncome	−0.462*	−0.440*	−0.431*	−0.435*	−0.425
	(0.258)	(0.256)	(0.256)	(0.256)	(0.259)
Urban	0.0369	0.0352	0.0489	0.0448	0.0410
	(0.109)	(0.109)	(0.108)	(0.108)	(0.109)
Marriage status	0.115	0.122	0.119	0.122	0.0999
	(0.123)	(0.123)	(0.122)	(0.123)	(0.123)
Emp. status	−0.153	−0.161	−0.171	−0.169	−0.178
	(0.134)	(0.133)	(0.133)	(0.133)	(0.133)
Gender	−0.0670	−0.0690	−0.0699	−0.0707	−0.0938
	(0.107)	(0.107)	(0.108)	(0.107)	(0.108)
Education	−0.0660	−0.0651	−0.0713	−0.0684	−0.0709
	(0.398)	(0.392)	(0.391)	(0.391)	(0.385)
Christian	0.125	0.121	0.116	0.115	0.109
	(0.124)	(0.125)	(0.125)	(0.125)	(0.125)
Greater Accra	0.0628	0.0163	−0.00792	0.00270	−0.0493
	(0.227)	(0.220)	(0.214)	(0.218)	(0.220)
Western	−0.450*	−0.494**	−0.503**	−0.507**	−0.546**
	(0.237)	(0.232)	(0.233)	(0.232)	(0.238)
Eastern	−0.0139	−0.0558	−0.0667	−0.0701	−0.134
	(0.195)	(0.191)	(0.190)	(0.190)	(0.198)
Volta	0.485*	0.431	0.415	0.418	0.365
	(0.268)	(0.265)	(0.262)	(0.261)	(0.266)
Ashanti	0.638**	0.586**	0.557**	0.565**	0.509**
	(0.255)	(0.242)	(0.240)	(0.244)	(0.244)
Brong Ahafo	0.186	0.117	0.0901	0.104	0.0255
	(0.292)	(0.285)	(0.282)	(0.286)	(0.289)
Central	−0.0331	−0.0466	−0.0654	−0.0571	−0.0682
	(0.297)	(0.292)	(0.291)	(0.291)	(0.292)
Upper West	−0.129	−0.152	−0.153	−0.153	−0.149
	(0.173)	(0.171)	(0.171)	(0.171)	(0.172)
Risk and return	0.688***	0.701***	0.696***	0.697***	0.704***
	(0.113)	(0.113)	(0.113)	(0.113)	(0.113)
Knowl. of Stock	0.0316	0.0183	0.0185	0.0205	−0.00938
	(0.127)	(0.126)	(0.127)	(0.127)	(0.126)
GSE Awareness	0.514***	0.494***	0.486***	0.486***	0.465***
	(0.126)	(0.124)	(0.124)	(0.124)	(0.125)
Inv. financing	−0.0812	−0.0812	−0.0840	−0.0817	−0.0805
	(0.0830)	(0.0827)	(0.0828)	(0.0828)	(0.0834)
Inv. Objective	1.138**	1.183**	1.150**	1.151**	1.151**
	(0.498)	(0.485)	(0.485)	(0.491)	(0.472)
Saving and Inv.	0.00357	0.0111	0.00931	0.00941	0.00197
	(0.0614)	(0.0613)	(0.0612)	(0.0615)	(0.0617)
Risk averse	−0.114	−0.122	−0.121	−0.120	−0.132
	(0.121)	(0.121)	(0.122)	(0.122)	(0.122)
Constant	3.912	3.669	3.641	3.682	3.655
	(2.410)	(2.393)	(2.397)	(2.397)	(2.414)
Observation	712	712	712	712	712
Chi2	90.750	90.616	91.483	89.549	90.246
P-values	0.000	0.000	0.000	0.000	0.000

The table presents the interaction of financial literacy and financial inclusion on stock market participation. Financial inclusion indicators which are ownership of an account (accto), saving using an account (saving), access to bank credit (credits), frequency of usage (freqwith) and usage of account to make payment (upmt), financial literacy, household characteristics (Age, Age2, Hhsize, Income, Urban, Employment status, Marriage status, and Religion), financial behaviour (Saving and Investment behaviour, Risk aversion, Investment Objective, Investment Financing) and the region of residence (Greater Accra, Western, Eastern, Central, Brong Ahafo, Upper West, Volta, Ashanti) are regressed against the stock market participation indicator; preparedness to buy or sell shares given the opportunity to convert shares to cash (StockConv). StockConv is the dependent variables whereas financial literacy, financial inclusion indicators, household characteristics and financial behaviour are independent variables. InvStock is the dependent variables whereas financial literacy, financial inclusion indicators, household characteristics and financial behaviour are independent variables. A robust probit is employed to examine the relationship between the variables specified. Robust standard errors are reported in parentheses, ***, **, and * indicate statistical significance at 1%, 5% and 10% level respectively. The diagnostic tests reported are: (1) Observations (2) Chi-square (3) P-values