EFFECTS OF THE COLLAPSE OF GN BANK ON FINANCIAL INCLUSION AMONG AGRARIAN HOUSEHOLDS IN THE TOLON DISTRICT OF THE NORTHERN REGION OF GHANA

Abstract

The study examined the effects of the collapse of GN Bank on the financial inclusion of agrarian households in the Tolon District of the Northern region of Ghana. The study adopted a descriptive survey design with a mixed research approach to achieve the study objective. Through a multi-stage sampling technique, 210 agrarian households from Nyankpala and Tolon where the bank used to have branches in the District were surveyed. Personal and key informant interviews were employed in gathering data for the study. Descriptive statistics such as percentage, frequency distribution, paired sample T-test, and Kendall’s Coefficient of Concordance were applied in analysing the data and the results were presented using tables and graphs. The study revealed that after the collapse of the GN bank, the majority (69.3%) of the respondents surveyed resorted to home savings and the use of mobile money services to meet their financial service needs. The majority 147 (70.0%) of those using mobile money services were subscribers of MTN mobile network. Only 5% of the 210 former customers of the then GN-Bank had bank accounts with other banks. Moreover, most (71.9%) of the respondents surveyed had their savings and/or investments with GN-Bank before it collapsed, with only 34.5 percent able to retrieve savings or investments from the bank. In general, the collapse of the GN Bank had a significant negative effect on the financial inclusion of agrarian households in the study area. Additionally, the study revealed that the most pressing constraint agrarian households faced in accessing and using financial services is low financial literacy in dealing with other banks and financial institutions. The study recommends that the District Assembly should encourage other banks to open branches in the district capital.