Abstract:
The main aim of the study is to investigate the relationship between financial
inclusion and poverty incidence and how gender, location and household size
conditions the relationship. The study employed a quantitative approach and
an explanatory design to explore the relationships among the variables.
Secondary data was obtained from the Ghana Living Standards Survey (2017)
and the logistic regression and bivariate probit models were used for the
estimations. The results revealed that financial inclusion significantly reduces
poverty incidence in Ghana irrespective of the proxy adopted for financial
activities. In terms of effectiveness, it was observed that savings had the
greatest impact on poverty incidence followed by loans and then insurance.
Poverty was also, found to have negative effects on households’ likelihood to
purchase an insurance policy. The results further suggested that the gender of
the household head, location of household head, and the size of the household
significantly moderate the effects of financial inclusion on poverty incidence.
The household size indicate an inverted U-shape relationship with poverty
incidence in the presence of financial inclusion. Household heads in the
Savannah zone benefited less from the impacts of financial inclusion on
poverty incidence as compared to those in the Coastal and Forest zones.
Financial inclusion was found to benefit male-headed households more than
female-headed households. The study, therefore, recommends that savings and
loans must be the target of policy makers in reducing poverty incidence in
areas where poverty incidence is high in Ghana. The Central Bank must create
a specialized inclusion program in the Savannah zone of Ghana to reduce
poverty incidence in the area.
