Ghana Access to Finance
Ghana has low levels of financial inclusion of individuals and access to finance for firms remains a major challenge; some of the key issues include low ownership and usage of accounts, dominance of cash, limited access points, limited electronic a...
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| Format: | Report |
| Language: | English |
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World Bank, Washington, DC
2018
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| Online Access: | http://documents.worldbank.org/curated/en/956691533058661581/Ghana-access-to-finance-note http://hdl.handle.net/10986/30216 |
| Summary: | Ghana has low levels of financial
inclusion of individuals and access to finance for firms
remains a major challenge; some of the key issues include
low ownership and usage of accounts, dominance of cash,
limited access points, limited electronic and mobile
transactions, and high collateral, overall limiting
outreach. Financial inclusion figures fare well compared to
the Sub- Saharan Africa region, but in absolute terms only
40.5 percent of adults have an account at formal financial
institution. Ownership and usage of electronic payment
instruments is very low and the majority of transactions are
conducted in cash. Mobile banking in Ghana is at a nascent
stage with only 13 percent of adults having a mobile account
and the number of mobile phone-based financial transactions
is incipient. While majority of small and medium firms have
access to formal accounts, large majority of them relies on
internal finance for investments, with only around 23
percent having a bank loan or line of credit. Private sector
credit to GDP is low at about 19 percent in 2014. Ghana’s
limited infrastructure restricts access to both formal and
unregulated financial institution, particularly in rural
areas, with limited number of branches and ATM networks.
Finally, high collateral requirements of over 200 percent of
the loan amount for all-sized firms and over 250 percent for
small firms, with real property as the most frequent type of
collateral required, makes access to formal finance
virtually prohibitive for many firms. The Access to Finance
Note for Ghana identifies key issues and recommendations to
enhance access to formal financial services for firms and to
promote financial inclusion of individuals. The note
provides a status of financial inclusion and access to
finance in Ghana, along with a review of banking and
microfinance sectors, including decomposition of interest
rate spreads based on available data, leasing sector, as
well as key financial infrastructure issues related to
credit reporting, secured transactions, and payment system.
Further, this note complements a collection of analytical
work related to access to finance agenda, including notes on
the microfinance sector, private equity and venture capital,
diagnostic review of financial consumer protection, and a
study on development finance, all providing more details on
these topics. |
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