Intensifying financial inclusion through the provision of financial literacy training: a gendered perspective

ABSTRACT

This study examines the impact of financial literacy training on financial inclusion and its intensity using data collected from a randomised control trial. An additive index of financial inclusion is generated from four financial inclusion indicators. After testing for baseline balance and estimating impact, our findings show that beneficiaries of financial literacy training are about 7.2 percentage points more likely to own an account while they are 8.2 percentage points more likely to save. Overall, beneficiaries of financial literacy training had a 9.5 percentage points advantage in receiving financial assistance than their non-beneficiary counterparts. While financial literacy training only showed a significant impact on account ownership for female-beneficiary households, male-beneficiary households also only experienced an impact in their savings behaviour and receipt of financial assistance. Moreover, beneficiaries of financial literacy training are more likely to intensify their financial inclusion and the intensity of inclusion is higher for male and young beneficiary households. The results highlight the need to strengthen financial literacy training in order to close the gender financial inclusion gap.

KEYWORDS:

• Financial inclusion
• financial literacy
• gender
• impact
• poverty

JEL CLASSIFICATION:

• C93
• D14
• D91
• E21
• G00

Acknowledgments

We are grateful to the Rural and Agricultural Finance Programme (RAFiP) for providing funds for the project that yielded the data for this study. Thanks to Professor Samuel K. Annim and the Directorate of Research, Innovation and Consultancy (DRIC) at the University of Cape Coast (UCC), Ghana for granting us permission to use the data. We also appreciate the support provided by Dr James Atta Peprah (the principal supervisor of the project). Finally, we would like to thank every team member that contributed to the success of the project.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ Although gender is a social construct that distinguishes the power, roles, responsibilities, behaviours and obligations of women from those of men in a society (Kaliyath 2016), the gender analysis undertaken here attempts to reflect differences in the impact of FL on males and females. A number of studies (Deere, Alvarado, and Twyman 2012; Fossen 2012) have also used this approach.

² In this paper, the terms financial practice and financial behaviour are used interchangeably.

³ This is the National Switch and Smart card payment system in Ghana which offers Deposit-taking financial institutions (i.e. Universal banks, Rural banks and Savings and Loans) a platform to interoperate (Ghana Interbank Payment and Settlement Systems Limited – GhIPSS n.d.)