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Financial Inclusion and Growth of Non-farm Enterprises in Ghana

  • Isaac Koomson
  • Muazu Ibrahim
Chapter

Abstract

Overtime, the policy to enhance financial inclusion at the national and household or individual levels has coincided with the increasing need for non-farm enterprises in addition to mainstream farming due to climate change and as an income diversification strategy. Using data from the sixth round of the Ghana Living Standards Survey, this chapter examines the influence of financial inclusion on growth of non-farm enterprises. We construct a multi-dimensional measure (index) of financial inclusion relying on 14 indicators while employing an instrumental variable approach in examining financial inclusion–firm growth nexus. Our evidence suggests that improvement in non-farm entrepreneurs’ level of financial inclusion is growth enhancing with higher probability in the urban relative to rural areas. At the policy level, strategies targeted at boosting financial inclusion will not only spur firms’ growth but also expand these enterprises and hence improve tax revenue for the economy as a whole.

JEL Codes

D1 D2 D6 G4 R2 

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Copyright information

© The Author(s) 2018

Authors and Affiliations

  • Isaac Koomson
    • 1
    • 2
  • Muazu Ibrahim
    • 3
  1. 1.UNE Business SchoolUniversity of New EnglandArmidaleAustralia
  2. 2.Network for Socioeconomic Research and Advancement (NESRA)AccraGhana
  3. 3.School of Business and Law, Department of Banking and FinanceUniversity for Development StudiesWa, Upper West RegionGhana

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