Financial Inclusion and Self-Employment in Rural Ghana

In this chapter, we examine the relationship between financial inclusion and self-employment in rural Ghana, acknowledging the relevance of access to employment as targets of SDG 8. Despite the evident socioeconomic divide between rural and urban areas in Ghana, we draw attention to the improving effect of financial inclusion on self-employment in the rural parts of Ghana. Data for the study was sourced from rounds six and seven of the Ghana Living Standards Survey. The application of different estimation techniques provides evidence of the relationship. In measuring financial inclusion, both unidimensional and multidimensional constructs were used particularly to examine the contribution of financial inclusion. The findings from our investigation show that the single and multidimensional measures of financial inclusion have considerable positive effects on self-employment, particularly non-agriculture self-employment. Mobile money alone was also found to influence non-agriculture self-employment positively. We also indicate that financial inclusion, together with increasing level of education, decreases agric self-employment. It suggests that the education system might not have an appreciable effect on encouraging agric self-employment even in the presence of financial inclusion.