Gender and financial literacy in Ghana

Abstract

PurposeThis study examines the gender gap in financial literacy in Ghana.Design/methodology/approachThis study employs primary data and probit models together with the Oaxaca-Blinder decomposition strategy.FindingsThe authors found that males are generally more financially literate than females are. The results also show that much of the gender gap in financial literacy is explained by differences in coefficients or how literacy is produced and not by differences in the demographic and socio-economic characteristics of men and women. Thus, the gap may be attributable to unobserved behavioural and psychological traits, as well as cultural and social norms regarding gender roles in financial decision-making.Practical implicationsIt is evident that further action is needed to bridge the gap between men and women with regards to financial literacy. Effective interventions may include improving women's access to financial information and education, as well as encouraging their participation in household financial decision-making and planning. In particular, less educated women need to be targeted by policy initiatives in this regard.Originality/valueThis study contributes to the scant literature on gender gap in financial literacy in developing countries.

Determinants of Financial Literacy and its Effect on Stock Market Participation among University Students in Ghana

“…Once university students possess a certain level of financial literacy, their intentions to participate in the stock market are likely influenced by their attitudes toward stock market investment, subjective norms from peers or family endorsing or discouraging such participation, and perceived control over their ability to navigate the complexities of the stock market (Twumasi et al, 2021). TPB offers a comprehensive framework to analyse the interplay of psychological factors shaping students' decisions to engage with the stock market (Sarpong-Kumankoma et al, 2023). By examining the determinants of financial literacy and its subsequent effect on stock market participation through the TPB, researchers and educators can develop targeted interventions and educational initiatives aimed at enhancing financial literacy and promoting informed investment decisions among university students.…”

“…The independent effects of income, age, and education on cognitive skills and risk tolerance have been empirically established (Van Rooij et al, 2011). Gender differences have been noted, with studies suggesting that boys initially exhibit greater financial literacy, but this trend may be changing over time (Sarpong-Kumankoma et al, 2023;Lusardi et al, 2010). Gender gaps in financial literacy may stem from unobserved behavioral traits and societal norms (Aristei and Gallo, 2022).…”

“…In Ghana, financial literacy is essential for promoting stability and economic empowerment among the populace (Sarpong-Kumankoma et al, 2023). People who are financially literate have the information and abilities needed to make wise financial decisions for the rest of their life (Chen et al, 2023;Twumasi et al, 2021).…”

“…The discourse on financial literacy, particularly in the context of global financial uncertainties, has garnered significant scholarly attention, predominantly within developed countries. Despite comprehensive studies in developed nations highlighting the lack of financial knowledge in basic financial matters, including interest compounding and risk diversification, there is a paucity of research in developing countries, notably in Ghana (Sarpong-Kumankoma et al, 2023;Twumasi et al, 2021;Karakara et al, 2022;Akakpo et al, 2022). Notably, few studies have explored financial literacy among university students, revealing varying levels of knowledge and its potential impact on credit card usage, debt levels, stress, and academic performance (Ergün 2017;Hidayati et al, 2021;Kimiyaghalam and Safari, 2015;Lusardi and Mitchell, 2014).…”

“…Although financial literacy is widely acknowledged as a crucial factor in influencing people's financial decision-making, there is still a lack of research on the precise relationship between financial literacy and stock market involvement in Ghana. The majority of the literature that has already been written about financial literacy concentrates on its broad implications, ignoring the subtle aspects that affect stock market participation in Ghana (Sarpong-Kumankoma et al, 2023;Twumasi et al, 2021). Given Ghana's distinct economic and cultural environment, the study dilemma stems from the need to comprehend the precise mechanisms via which financial literacy influences people's decisions to engage in the stock market.…”