Bank Crisis, Self-efficacy and Depositors Confidence in Financial Institutions in Ghana: the Case of Cape Coast Metropolis

Abstract

ABSTRACT The study dwell on the aftermath of the current bank crisis and the subsequent reforms to examine the extent to which depositors’ confidence were affected as well as the role that depositors’ self-efficacy plays in the extent of the effect on depositors’ confidence. Primarily, the study sought to examine the relationship that exist among bank crisis, self-efficacy and depositors’ confidence in the financial sector of Ghana. The purposive sample was used to sample a total of 100 depositors from the Cape Coast Metropolis for data collection and structured questionnaire was used for the data collection. The distribution free asymptotic SEM was used to model the simultaneous relationship between self-efficacy and investors’ confidence in the mist of bank crisis. The results suggested that bank crisis has adversely affected the confidence level of depositors in the financial sector of Ghana. Depositor confidence level during the crisis statistically depended on their sex and age group. A significant bi-directional relationship was observed between financial self-efficacy and depositors’ confidence during crisis. The bankers were found to have adequate knowledge on the way forward in ensuring confidence in the financial sector of Ghana. The bankers recommended law enforcement, introduction of depositor’s insurance in Ghana, education of the depositors to manage their expectation and seek more information on investment product before investing huge amounts as the way forward reduce the possible effects of the crisis. The Central Bank must put in measures to boost depositors’ confidence through sensitisation programmes