1. Research Background

Financial inclusion has been a major concern for the policymakers in many countries. A lot of countries use financial inclusion as an attempt to achieve more equitable economic growth (Collard, 2010). The united nation set financial inclusion as one of the main objectives in the millennium Development Goals (MDG) to attain sustainable development and improve the world welfare that is based on human rights and equality to encourage social, economic, and environmental development.

In general sense, financial inclusion is the expansion of financial system, financial services, or product to allow access to people in the community. It also helps expand financial network to ensure efficient financial flow within a countrys border. The inclusion is anticipated to upgrade peoples likelihood, reduce poverty and enhance economic growth and development.

The world bank defines financial inclusion as the case where individuals and business have access to useful and affordable financial products and services that meet their needs -transactions, payments, savings, credit and insurance delivered in a responsible and sustainable way. (www.world bank.org/en. /topic/financial inclusion). Financial inclusion also ensures that different groups of people under a single cover of financial system, mostly people in very low-income brackets, the poor and the marginalized sections including migrants and make them access the basic financial services.

The work of Classens ( 2004) indicates financial inclusion has gained a lot of attention from emerging economies as it suspected to ensuring holistic and equitable growth to a nation. Most developing countries have a large population of their people living in rural areas and have limited access to financial facilities and services of which Ghana is an example. A lot of research has proven the benefits of the financial sector in a nations development. Notwithstanding the role of financial sector in the development of an economy, which concern the banking sector and the capital market in the developing countries, usage of financial services is enjoyed by the wealhy individuals and people who are better off, leaving the needy and the poor individual and those living in the remote areas.

According to Pearce (2011), the significance of financial inclusion is now widely felt, even become a policy priority in may countries[AGD1] . FI plays an essential role in building a strong foundation of an economys financial infrastructure, which eventually will facilitate its economic growth and development (Sharma, 2016). Policymakers in developing economies have taken the initiative to expand the access to financial service to those who are excluded. Effort to expand the access to financial service for all societies in developing economies has resulted in rapid expansion of financial inclusion over the past decade.

In Africa, a lot of financial institutions are located in the urban area, abandoning the rural area (Mpuga, 2004). Research conducted by Akpandjar et. al. (2013), showing there are more financial institutions and banks centered in the cities and urban areas, disclosing why many of the Ghanaian citizens living in the rural areas are neglected from banking in Ghana. Financial Inclusion can be explained as the extension of financial products and services at a lesser cost and on time to the portion of the society who are economically not strong and thus, giving them financial support for their substance and also empowering them socially (Deka, 2015)

Moreover, Financial Inclusion help in bridging the gap among the poor and the rich, as well as female and male person, through enabling the underprivileged groups (Swamy, 2013). Additionally, it permits individual to access funds from the financial environment that encourages consumption and leads to economic growth. It also a policy to allow the more fragile and defenseless segments of society inside the ambit of the composed financial system. It makes conditions to access satisfactory credit and other financial services by powerless group.

In spite of the advantage contributed by financial inclusion to individuals and the country, there exist lack of accessibility to financial products. Sometime now, Ghana has initiated numerous financial policies targeted at enrolling more unbanked to the banking space. For example, ministry of finance in 2020 launched three policy initiatives designed to deepen the financial inclusion and accelerate the shift to digital payment. The national financial inclusion andmi development strategy developed in collaboration with world bank, aims at increasing financial inclusion from currently 58% to 85% by 2023, helping create economic opportunities and reducing poverty.

Due to the fact that a lot of Ghanaians do not have access to formal banking, it is necessary to undertake a study that will assist in unraveling the reasons why most citizens are not included in formal banking as well as factors that determine financial inclusion.

1. Research Problem

Due to the continuous financial challenges in the world especially Ghana, many economies commenced concentrating on stability through regulation, as well as pursuing to balance the necessities of those policy with comprehensive advancement, specifically the less developed countries. (Aryeetey and Kanbur 2008). Ghana has initiated many financial changes that drives at improving access to small firms and families with low income to financial inclusion (Aryeetey and Kanbur 2008). Due to the fact that financial inclusion has great prospects to the progress of economies, if policymakers are not diligent towards the advancement of financial inclusion, they may likewise increase the rate of bank defaults, which will affect the financial sector as a whole.

Even though there has been lot of development motivating people into the financial sector formally; many are not captured (Aryeetey and Kanbur 2008; Beck and Cull, 2015). About 68% adult in the country have a bank account whether mobile money or bank account as of Dec 2021, implying that there is a lot of people unbanked.

Dermiguc-kunt et.al (2014) discovered about 30% of bank accounts in the developing countries been dormant as well as about 6million accounts were opened within four years in South Africa and almost 500 were dormant. Activating a new account does not end up to frequent usage. Many research works have analyzed the component which drives the FI in Ghana and other parts of the world (Wale & Makina 2017; Akpandjar et. Al, 2013). Makina (2017) discovered sex, income and educational level to be the key contributors of financial balance possession in 18 SSA countries. According to Akpandjar et. al (2013) the number of households, sex, age, marital status, income and occupation are leading drives of household participation in the financial space.

A greater part of these initiatives, that was to enforce that the individuals who do not have bank accounts to the financial sector have failed, analyzing the way policymakers fail to enquire from the unbanked their motive for not accessing it. In order to achieve financial inclusion in Ghana, we need to come out with appropriate package that will attract the unbanked. Also, considering their interests, policymakers can execute strategies that will suit their interest.

In contrary to, Wale and Makina (2017) researched on the reasons behind individuals not taking part in the financial sector, there was no research done by Akpandjar et. al and limited research has been undertaken on this issue in Ghana.

Nonetheless for financial inclusion strategy and policies to thrive well in the country, there is the need for extensive research to ascertain why some Ghanaians have still not subscribed to the banking services or financial sector and its impact on economic growth. Some research has revealed that religious affiliation has a substantial impact of financial inclusion (Joy et. al, 1991). Nevertheless, narrow research has been conducted in Ghana to establish how religious connections influence financial inclusion in Ghana. Therefore, the decision to add religious affiliation to the variables in the study.

1.3. Research Purpose

The study seek to examine the determinants of financial inclusion and its impact on the economic growth of Ghana and to make suggestions based on the findings. The study will specifically look at the following:

1. To determine the various determinants of financial inclusion in Ghana.
2. To examine the impact of financial inclusion on economic growth

1.4. Research Questions

In relations to the mentioned research objectives, the following research questions listed below will be answered;

i. What are the various determinants of financial inclusion in Ghana?

ii. What is the impact of financial inclusion on economic growth in Ghana?

1.5 Proposed Methodology

This chapter is to outline the method that will be used for this study, and the following structures will be adopted: research design, target population, sampling techniques, sample size, data collection methods and procedures which include types of data, questionnaire development, pilot study and the full administration of instrument. Finally, the method of data analysis as well as validity and reliability of the data.

To be able to answer the research questions and objectives, the study will adopt the quantitative method of research. Due to the quantitative nature of the study, data gathering will be done through survey with the aid of structured questionnaire. The survey method will be employed for the data gathering to enable the researcher cover a larger sample size in a short time. For the purpose of time and financial constraints and uncertain knowledge about the exact population size of the study area, a convenient sampling will used for selecting respondents

1.6 Significance of the Research

Encouraging people to subscribe banking services requests finding explanation to market failure problem such as moral hazard and asymmetry information that apprehend people from disparaging in the financial sector. It also accompanies initiating services that will meet the expectation of clients. Policies can only meet the expectation of clients only when those in management are oblivious of their conduct on such activity. Most often, the financial sector makes reforms for customers without researching on how they will react to it.

The research is important it will detect why most adult Ghanaians have still not subscribed to the banking of financial services. This will encourage stakeholders to implement strategies that will the unbanked to the banking or financial sector. It will also assist financial institution to be abreast with challenges that their clients encounter whiles transacting business with them. The research will also be a source of information to further studies about the related issues.

1.7 Research Scope and Limitations

The research will be conducted in Ghana. This will ensure the use annual time series data from 1960 to 2022. This research examines the causal link between the financial inclusion and economic growth in Ghana. Data will be taken directly from the Global Financial Development Database (GFDD), Ghana living standards survey round six (GLSS 6) data, Ghana statistical service (GSS) and World development indicators (WDI). The research will use variables such as: household & demographic features, bank account possession, religious affiliation and etc.

1.8 Organization of the Thesis

This study is divided into five chapters as indicated below.

Chapter 1- Introduction

This section provides the background and context of the study. The research problem, question and significance of the research are as well touched on in this chapter.

Chapter 2- Literature Review

This chapter covers the review of literatures centered on the subject matter of the study. Diverse experiences are sourced both empirical and theoretical in order to provide a legitimate basis for comparism.

Chapter 3- Context of the Study

This chapter touches on the context of the case study in order to provide a good view to the research work.

Chapter 4- Research Methodology

This chapter touches on the methodology of the research considering the study design, data collection and analysis.

Chapter 5- Results, Discussions and Conclusion

This section of the work will focus on the findings, recommendations and conclusions of the research.

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