Understanding the Determinants of Saving in Ghana: Does Financial Literacy Matter?. (31st May 2018)

• Record Type: Journal Article
• Authors: Baidoo, Samuel Tawiah; Boateng, Elliot; Amponsah, Mary
• Is Part Of: Journal of international development. Volume 30:Number 5(2018:Jul.)
• Page Start: 886
• Page End: 903
• Publication Date: 2018-05-31
• Subjects: domestic savings -- financial literacy -- sustainable economic growth -- demographics -- life cycle hypothesis -- Ghana; Economic development projects -- Developing countries -- Periodicals; Developing countries -- Economic policy -- Periodicals; Developing countries -- Foreign economic relations -- Periodicals; Economic development -- Periodicals; 330.91724
• DOI: 10.1002/jid.3377
• Languages: English
• ISSNs: 0954-1748

Abstract

Abstract: Domestic savings remain low in Ghana despite several attempts to improve this situation. Whereas existing studies on private savings have identified several determinants, the role of financial literacy in saving decisions has not been explored. In this paper, we build on existing studies and provide evidence supporting our hypothesis that financial literacy is key to promoting domestic saving. The study relies mainly on primary data, and the binary probit regression model is employed as the estimation technique. Our results show that improving financial literacy among Ghanaians should be incorporated into the broad policy package aimed at increasing domestic saving which is a prerequisite for investment and subsequently sustainable economic growth. Copyright © 2018 John Wiley & Sons, Ltd.