The effect of financial inclusion on urban population in Ghana

Background: Ghana has witnessed rapid urban population growth over the past decades, which has led to vast environmental, settlement, human, and ecological issues. It is therefore extremely important to examine the factors that influence urban population growth in Ghana to provide policy directions for policymakers. Objectives: The article examines the impact of financial inclusion on urban population growth using three different measures of financial inclusion. Methods: We applied the autoregressive distributed lag model (ARDL) to historical time-series data covering the period of 1960 to 2020. Results: The estimates from the ARDL model show that financial inclusion exerts a positive effect on urban population growth. Specifically, the findings confirm that financial knowledge, usage, and availability of financial services contribute significantly to urban population growth over time. Conclusion: The findings in this study suggest that government and financial institutions should utilize various channels to increase financial knowledge, usage and availability of financial services among individuals living in deprived areas where there are a limited number of financial institutions.