Financial literacy, microfinance, and performance of artisanal fishermen in Elmina fishing community

Abstract

The growth of Ghana’s fishing sector has been spectacular in the past years leading to the sector generating more than GHS1billion in revenue annually and accounting for 4.5 percent of Ghana’s GDP while creating employment for about 210,000 people directly in the sector. However, the financial literacy of the fishing community in Ghana is reported to be low with an unimpressive performance. The study investigated the relationship between financial literacy, microcredit, and performance of artisanal fishermen in Elmina fishing community of Ghana by employing Partial Least Square Structural Equation Modeling. A survey of 214 randomly sampled fishermen was conducted using a standard questionnaire to provide empirical answers to the underlying questions of this study. The study showed that there is a positive effect of financial literacy on financial well-being. The results further indicated that fishermen with poor financial knowledge and financial wellbeing lead to their inability to acquire credit facilities from microcredit institutions. Regression estimation results reveal that there is a positive and significant effect of financial behaviour on the performance of fishermen. The study recommended that the Ministry of Fisheries should put in place programmes that will improve the financial education of fishermen.