Enhancing Financial Inclusion in Ghana Through Islamic Finance

As this study seeks to explore how Islamic finance can enhance financial inclusion in Ghana the question that comes up is, 'can Islamic finance bring financial inclusion in Ghana? The objective of the study answered the question through empirical evidence and hypothesis testing. Therefore, the study concluded that there is a lack of financial inclusion in Ghana. The study further reveals that good economic performance and banking sector stability indicate enabling environment for financial inclusion. Even though the Bank of Ghana's ACT permits "non-interest banking services", it is therefore concluded that Islamic bank could operate in Ghana. However, more is needed to be done in order to achieve financial inclusion through Islamic finance and just operating will do not necessarily mean financial inclusion. Cash deposit/withdrawal, mobile money, and ATM usage indicate inclusion and least use of a mortgage, internet banking, and overdraft indicates financial exclusion. The study finding indicates on average most respondents are likely to be financially included. Similarly, higher income earners, higher educated individuals but religion and financial inclusion are related even though it is not significant. Distance to the financial institution and trust in the banking system influence financial inclusion. Moreover, the majority of the respondents heard about Islamic banking but have little understanding of how it operates which calls for public awareness. It is further concluded that government of Ghana is likely to adopt Islamic banking as answered by the respondents and the government has shown some goodwill towards adopting an Islamic bank in other to achieve making Ghana a financial hub for West Africa. It is therefore recommended that the government of Ghana should embrace Islamic finance in its effort to bridge the housing deficit through Diminishing Musharakah.