Abstract:
Ghana‟s financial sector has undergone several reforms due to regulatory noncompliance
and poor supervision, which led to the cleanup of many
unprofitable banks in 2018. Directives from the Bank of Ghana (BOG) to the
commercial banks to keep high reserves ratio and maintain interest rate
ceilings may negatively affect the competitiveness of the financial sector. A
quantitative research approach embedded with Explanatory Sequential Survey
Design was employed. Financial institutions in Ghana and uniform
distribution of bank outlets across its population were used. The study used
the census sampling method to select all the twenty-three commercial banks in
Ghana that survived the minimum capital requirement increment. Bank assets,
credit administration, and financial transactions through e-banking services
were used to measure the impact of financial intermediation on economic
growth. It was established that a significant positive relationship exists
between financial intermediation and economic growth in Ghana. Bank asset
to GDP has a positive relationship with economic growth. There was a
positive relationship between economic growth, which was proxied by per
capita income and bank assets. It was recommended that there should be a
policy and educational campaigns by the government and Bank of Ghana
through the National Council for Civic Education that will promote financial
intermediation by ensuring more financial inclusion among those in the
informal sector and the rural areas.
