This brief is part of the Insights @ Center for Emerging Markets, a publication focused on cutting-edge ideas and advice for global leaders about emerging markets.
By Yaa Afi Osei, Helena Barnard and William Derban (all University of Pretoria), and Dominic Essuman (University of Pretoria and University of Sheffield)
In Short: This study examines whether financial literacy drives bank account usage among rural populations in Ghana provided with zero-cost mobile bank accounts. Using a field experiment with 142 participants across four rural communities (Assin Fosu, New Edubiase, Sefwi Wiaso, Sefwi Asawinso), researchers find that neither financial literacy nor its interaction with financial self-confidence significantly increased account usage. Follow-up surveys and interviews show that usage hinged on income constraints and a concrete payment need; only 3 of 142 participants (2.11%) used the accounts, typically when clients required a bank transfer for contract work. Access and literacy alone were not sufficient to generate usage, even when accounts were free, simple to operate, and opened during the cocoa harvest when incomes were expected to be higher. These findings suggest that policymakers should combine banking access initiatives with economic empowerment strategies to enhance account usage among underserved populations.
Bank accounts are the foundation of financial inclusion, enabling secure savings, access to credit, and the ability to make digital payments. In rural sub-Saharan Africa, low usage of banking services limits people's financial security and opportunities for entrepreneurship. Policymakers and NGOs have therefore prioritized financial literacy programs and expanded access to bank accounts, particularly mobile-based, zero-cost accounts. Yet, empirical evidence on whether these interventions lead to meaningful use of accounts remains limited.
Recent research by Osei, Barnard, Derban and Essuman tested the impact of financial literacy on bank account usage among young adults in rural Ghana. A field experiment provided 142 participants with free mobile accounts and tracked their usage over multiple waves. The study also incorporated self-efficacy, a measure of individuals' confidence in their ability to manage banking tasks, as a potential enhancer of the literacy effect.
The results were striking: only 2% of participants actively used their accounts, and neither financial literacy alone nor its interaction with self-efficacy improved usage. Interviews and surveys suggested why: access to an account and training in financial skills were insufficient when participants lacked a pressing need for banking or faced income constraints. Many participants relied on cash transactions, and low monthly income (about USD 38 on average during the study period) limited their ability to save or transact digitally.
These findings clarify that financial literacy interventions in isolation cannot guarantee financial inclusion. Access alone does not drive usage; rural individuals are motivated to use bank accounts primarily when they see a practical need, such as receiving client payments or saving surplus income. Additionally, usage increases meaningfully only once income exceeds a threshold that allows people to manage and store funds beyond day-to-day expenses.
Practical Implications
These findings point to several implications for policymakers, NGOs, and financial institutions seeking to promote meaningful financial inclusion in rural contexts:
- Measure progress by active usage, not ownership alone, and pair access and literacy initiatives with efforts that raise and stabilize incomes, so people have surplus to transact or save.
- Design efforts around concrete payment needs (e.g., contract payment programs that require bank transfers), since these directly motivate usage.
- Community-level approaches (such as farmer or trader associations that help commercialize and diversify activities) can support income and capability, making formal transactions more likely.
- Qualitative engagement should continue to surface context-specific barriers and triggers that condition whether literacy translates into use.
In conclusion, expanding access to bank accounts and providing financial literacy training are necessary steps, but they are not sufficient on their own. A multidimensional approach that addresses income constraints, practical motivations, and community support structures is essential for rural financial inclusion.
Original Work
Osei, Y. A., Barnard, H., Derban, W., & Essuman, D. (2025). Does financial literacy enhance banking transactions among rural people with access to bank accounts? Insights from a field experiment in Ghana. Africa Journal of Management, 11(1), 104–125.
Contact
If you are interested in learning more about this work, contact Dr Y.A. Osei at yaaosei29@gmail.com
