Financial Institutions In Ghana Research Articles

Fostering workplace civility in the Financial Sector: The influence of ethical leadership practices and ethical work climate

The research investigates ethical work climate as a mediator in the nexus between ethical leadership practice and workplace civility among employees of financial institutions in Ghana. Convenience sampling was adopted to obtain responses from 432 respondents from April to October 2022 using a self-reported questionnaire. The data gathered was analyzed using a partial least squares structural equation model. The findings of the study indicate that ethical leadership positively influences workplace civility and the ethical work climate. Additionally, the ethical work climate influences workplace civility and further mediates the association between ethical leadership and workplace civility. It is recommended that financial institutions work to create an ethical work climate where leaders can exhibit appropriate ethical leadership traits to enhance civility at the workplace. This study is a valuable contribution to the existing body of ethical literature since it fills a gap by examining interactions that have not been previously investigated within the ethical literature context.

Is financial technology a complement or substitute for domestic financial institutions in Ghana?

PurposeThis paper aims to examine whether financial technology is complementing the performance of domestic financial institutions or substituting their performance in Ghana.Design/methodology/approachThe paper used data from the Bank of Ghana Payment System Statistics and Time Series Data of the Bank of Ghana from 2012 to 2021, by using autoregressive distributive lags estimation technique.FindingsThe results showed that in both the long run and short run, financial technology has a significant negative impact on bank performance, indicating that fintech serves as substitutes rather than complements for Ghanaian banks. These results suggest that there must be a critical review on the interoperability policy in Ghana and that banks should take advantage of the financial technology to increase profit.Originality/valueBased on the authors’ study, no empirical work has been extensively done in the Ghanaian context by examining how financial technology serves as either a complement or substitute for domestic banking institutions. This paper focuses on exploring the key definition of financial technology in Ghana and how transactions through these media are affecting or improving the performance of banks.

The Impact of Capital Structure on the Financial Performance of Financial Institutions in Ghana

The study aimed to discover how capital structures (capitalization ratios and debt-to-EBITDA ratios) affect the financial performance of Ghanaian financial institutions. The study selected 15 financial institutions in Ghana using a purposive sampling strategy. Ten (10) financial organizations are listed on the Ghana Stock Exchange, while the remaining five (5) are not. The data was gathered from their audited annual report. The Stata software analyzed the data into fixed and random effects. The Hausman specification test was used to determine the appropriate method to present the study results. The random effect was considered the appropriate method to present the study's findings. We discovered that the capitalization ratio has a negative effect on the net interest margin, loan-to-asset ratio, and return on assets. The debt-to-EBITDA ratio was discovered to have a negative effect on net interest margin and return on an asset but a positive effect on the loan-to-asset ratio. The debt-to-EBITDA ratio was discovered to have a statistically significant effect on net interest margin and return on assets. We also found that financial institutions that are listed on Ghana's stock exchange have a statistically significant effect on net interest margin. In contrast, financial institutions that are not listed do not. The use of debt financing was found to have a statistically significant impact on the performance of financial institutions compared to equity financing. The use of debt financing gives managers a chance to take advantage of the tax shield by lowering the amount of tax they have to pay to the government. The use of debt financing helps maximize the wealth of shareholders.

Contract Work, a Blessing in Disguise? An Application of the Tenets of the Dual Labour Market Theory

This study aims at investigating the good and bad of contract employment and examines whether there have been changes in the working conditions over time. Specifically, the study explored why people accept contract work and the peculiar emotional challenges they experience due to their employment status. A qualitative research design was employed with data collected through interviews with 34 employees from six financial institutions in Ghana. Thematic analysis revealed that individuals’ reasons for accepting contract work were either for socioeconomic convenience, affective or job-related factors. The emotional challenges experienced by these contract workers were either psychological or social. Another finding that emerged pertained to intrinsic and extrinsic protective factors for the experience of these emotional challenges. These findings imply that although contract workers are more vulnerable and may experience a variety of emotional challenges compared to permanent workers, some of these contract workers consider their jobs a blessing rather than a curse.

Success Factors in Project Management in the Financial Sector in Ghana: Screening for Construct Items

This study screens for individual manifest variables that make up the critical success factors in project management in the financial services sector in Ghana. A descriptive quantitative research technique was employed. A sample of 75 project team members were selected from commercial banks, insurance companies, and non-bank financial institutions in Ghana. Data was analyzed using the Principal Component Analysis.  Apart from two manifest variables of culture; thus, beliefs, and general attitudes, all other variables significantly accounted for project success in the financial services sector in Ghana. Among the 9 factors retrieved, project team competence contributes the highest level of variance on project success, with about 21.3% of the variance contributed. Management commitment contributes the second highest variance on project success, with about 16.2% of variance. Culture contributes the least amount of variance to project success, thus 5.6% of the variance contributed. Project management organizations in the financial services sector would need to give priority to considering project team competency and management commitment, with consideration also given to other factors and individual manifest variables.

Determinants of credit demand and credit constraints among households in Ghana

This paper investigates the determinants of and trends in credit demand and credit constraints of households with respect to both formal and informal financial institutions in Ghana. Trends and explanatory factors over 1992–2013 using pooled data from four Ghana Living Standards Surveys are analysed using the Heckman Probit model. Estimates for the full population reveal that tertiary education is a significant determinant of both credit requests (positively) and credit constraints (negatively). In the rural population, household heads that were widowed or separated and those that lived below the poverty line are more likely to request credit and also more likely to experience credit constraints. In the urban population, the aged are less likely to request credit but more likely to experience credit constraints. The policy implication is that financial inclusion measures targeted to people living below the poverty line, the widowed and separated in rural communities are needed to respond to their relatively high demand for credit services and overcome their exclusion from access to credit that could help in generating income to reduce poverty. The sex of a household head is significant for binding credit constraints in the full population and the urban sample, but not significant in the rural sample. Surprisingly, the study finds a decline in the proportion of households requesting credit in the full population as well as rural and urban areas, indicating increasing self-exclusion.

Assessment of Financial Performance: A Case of some Financial Institutions in Ghana

Assessment of Financial Performance: A Case of some Financial Institutions in Ghana

Effect of Information Communication and Technology (ICT) on the Performance of Financial Institutions in Ghana; A Case of Barclays Bank Ghana Limited, Sunyani Branch

The study sought to examine the contribution of Information and Communication Technology (ICT) on performance of banks in terms of service delivery in financial institutions in Ghana. The high competition in the Ghanaian banking industry has forced rapid changes as a result of technological innovation, increased awareness and demands from customers. The study adopted both exploratory and descriptive research design. Qualitative research method was used in collecting data and data was analyzed qualitatively. The main instrument for collecting data was the structured questionnaire. A sample size of 50 respondents consisting of 8 staff members and 48 customers of Barclays Bank was used for the study. A structured questionnaire was the main data collection instrument. The purposive and systematic sampling techniques were used to obtain the required sample size. The main tool which was used for the data analysis was Statistical Package for Social Sciences. Frequencies and percentages were used to present the data in a tabular form. The limitation affecting the study was time and financial constraints. The study revealed that ICT has an appreciable positive effect on performance due to improved customer service delivery. This affects the growth of Barclays Bank. ATM service flaws such as withdrawal discrepancies, issuance of faulty cards and long time for applied ATM cards to arrive deter most customers from accessing the service. Following from this study, it is recommended, Barclays Bank enhances the performance of their ATMs and their networks to increase customers satisfaction.

Implications of digital economy for financial institutions in Ghana: an exploratory inquiry

The digital economy has revolutionised financial service provision and compelled financial services institutions to adopt technologies that help deliver quality service at a minimal cost. Due to the recent disturbance in the financial sector in the country, there is an urgent need for financial service providers to adopt relevant technologies to help reduce operational inefficiencies and maintain service quality. This article analyses the implications of the digital economy for enhancing the efficiency of financial markets. Drawing the existing literature, it concludes that the financial institutions in the country have quite embraced and integrated digitisation into their activities. Given the perceived high level of digital illiteracy among the populace, it was surprising to discover the number of people who have signed on unto such financial products. It was recommended financial institutions integrate their operations with the necessary digital technologies as it helps reduce operational costs. Furthermore, they need to invest in digital infrastructure and skills of their staff to embrace technology in service delivery. It is also suggested that policymakers strengthen the laws, policies, and regulations such as data protection and cybercrime to enable the players of the market to operate freely and confidently.

The Effects of International Financial Reporting Standards on Reporting Quality of Financial Institutions in Ghana

This study sought to examine the reporting quality of financial institutions in Ghana after adopting International Financial Reporting Standard (IFRS) as its official national reporting standard. Using a fixed effect logistic regression, the study compares the earnings management of banks and insurance firms before and after IFRS adoption on reporting quality. The data used was drawn from 51 financial institutions made up of 23 universal banks and 28 insurance companies observed over the period 2003 to 2014. The empirical results indicate that financial institutions exhibit more earnings management during the post-adoption era which is interpreted as a decline in the quality of financial reporting among financial institutions in Ghana. The results documented in this study add to the dearth of literature and contributes to the debate on IFRS adoption and its related impact on reporting quality (earnings management) among financial institutions from the perspective of an emerging market. The study is unique in the sense that it includes the insurance industry where the literature is largely silent especially, on the impact of IFRS adoption by countries on the African continent. Furthermore, unlike previous studies, this paper considers both listed and non-listed firms.

The effects of Ponzi schemes and revocation of licences of some financial institutions on financial threat in Ghana

PurposeThe purpose of this study was to assess the effects of the Ponzi schemes and revocation of licences of some financial institutions in Ghana on financial threat.Design/methodology/approachThe study adopted a quantitative research approach. Convenient sampling method was used to select 435 individuals from three regions in Ghana. Standardize questionnaire developed by the researcher was used as the main data collection instrument. The binary logistic regression was used to test the relationship between the dependent variable and the independent variables.FindingsThe results of the study showed a positive relationship between financial threat and job loss, general health, information search and loss of investment. However, negative relationship was identified between financial threat and total debt, stress, economic hardship and anxiety. Findings from this study imply that job loss, general health, information search and loss of investment are major factors that determined financial threat in Ghana.Practical implicationsThis indicates that individuals in Ghana have become uncertain regarding the use of current and future financial services in Ghana because most individuals have lost their jobs in the financial institutions, cannot get access to safe drinking water and education, need to gather more information before investing in financial institutions in Ghana and losing of funds invested.Originality/valueThis study is the first to test the effects of the Ponzi schemes and the revocation of licences of some financial institutions in Ghana on financial threat using binary logistic regression.

An Anatomy of the Business and Financial Performance of State-Owned Financial Institutions in Ghana (2012-2015)

An Anatomy of the Business and Financial Performance of State-Owned Financial Institutions in Ghana (2012-2015)

Determinants of Farmers’ Confidence Level in the Financial Sector of Ghana: A Case of the Ejura Sekeredumase Municipality of the Ashanti Region

This paper adopted the PPO model to examine determinants of the confidence level of farmers on the financial institutions using 274 randomly selected farmers from Ejura Sekeredumase Municipality. About 44.9% of the farmers reported not having confidence in the financial institutions of the country, 21.9% were somehow confident in the sector, 17.5% were confident whereas only 15.7% were very confident in the sector. Male farmers were more likely to be very confident in the financial sector whilst education in years, farmers who ever lost savings or investment as well as those with current savings and/or investment all had positive outcome in the likelihood of being very confident in the financial sector. Duration of farmers with a financial institution and farmers who ever encountered challenges in a financial institution are less likely to be very confident in financial institutions in Ghana. The Central Bank should develop a different proactive educational model or approach to educate farmers on how to identify risk and other exposures that may be associated with the financial institutions operating in the rural areas in order to enable them to take decisions towards savings and investment. This will boost their confidence levels.

The effects of IFRS adoption and firm size on audit fees in financial institutions in Ghana

PurposeThis study aims to investigate the effects of international financial reporting standards (IFRS) adoption and firm size on auditors’ fees determination in the Ghanaian financial industry.Design/methodology/approachThe authors use the annual report of 52 listed and non-listed firms spanning from 2003 to 2014. Guided by the hypotheses, the authors conditioned audit fees on IFRS adoption and firm size and execute robust fixed effects panel regression.FindingsThe results show that IFRS adoption has a positive coefficient with audit fees suggesting that the adoption of IFRS, indeed, increases the audit fees paid by banks and insurance firms, as well as the industry as a whole. The results are consistent with the idea that IFRS adoption increases auditor efforts with respect to time and complex nature of some aspect of the standards. Again, as expected, the coefficient of size is positively and significantly related to audit fees. This indicates that the size of the auditee plays a vital role in determining audit fees.Research limitations/implicationsThe study is limited by industry (i.e. the financial services industry) and geography (i.e. Ghana). The authors propose further research that will widely consider other sectors and countries to improve the current scanty literature in this area. Besides, theoretically, the study is limited to the lending credibility theory and feels compelled to reiterate the importance of considering alternative theoretical perspective(s) in future research.Practical implicationsThis study is significant to practitioners as it demonstrates the importance of the determinants of the auditors’ fees. It helps auditors to apply the relevant charging formula when determining audit fees, while it helps managers to improve upon the quality of reporting to control audit bill and forecasting their audit expenditure.Originality/valueThe results of the study extend the literature on the cost side of IFRS adoption by investigating the financial services industry and non-listed firms in a new context, i.e. a developing country where this research is uncharted. The existing studies based their analysis on either cross-section or pooled analysis and shorter post-adoption period (Cameran and Perotti, 2014). However, using an extended post-adoption period data, the authors base the study on analytical panel model, which directly examine the cost side of IFRS adoption with size as joint key explanatory variables with emphasis on financial institutions and external auditors.

Ethical leadership and productive work attitudes among micro financial institutions in Ghana

PurposeEthical leadership wields a significant influence on productive work attitudes of employees. The relationship may partly be because of existing conditions in the organization. However, there is dearth of research on the impact that conditions in the organization affect work attitudes and other employee behaviours. Thus, the purpose of this study is to examine organizational climate as an explanatory mechanism for the relationship between ethical leadership and employees’ productive work attitudes (employee commitment, organizational citizenship behaviour).Design/methodology/approachThe researchers obtained responses from 150 employees working in micro financial institutions in the Greater Accra Region of Ghana. The cross-sectional survey design was used. The hypotheses of the study were analysed using regression analyses.FindingsFindings indicated a positive and significant relationship between ethical leadership and productive work attitudes (employee commitment, organizational citizenship behaviour). Hierarchical regression analyses revealed that organizational climate moderated the relationships between both ethical leadership – employee commitment and ethical leadership – organizational citizenship behaviours. Explicitly, ethical leadership produced the highest productive work attitudes when organizational climate was favourable for productive work attitudes.Originality/valueGenerally, this study highlights the prominence of organizational climate in understanding the influence of ethical leadership on employees’ work attitudes.

Intelligent System for Credit Risk Management in Financial Institutions

Credit crunch is an alarming challenge facing financial institutions in Ghana due to their inability to manage credit risk. Failure to manage credit risk may lead to customers defaulting and institutions becoming bankrupt, making it a major concern for financial institutions and the government. The assessment and evaluation of loan applications based on a loan officer's subjective assessment and human judgment is inefficient, inconsistent, non-uniform, and time consuming. Therefore, a knowledge discovery tool is required to help in decision making regarding the approval of loan application. The aim of this project is to develop an intelligent system based on a decision tree model to manage credit risk. Data was obtained from the bank loan histories. The data is comprised of four hundred observations with seven variables: client age, amount requested, dependents, collateral value, employment sector, employment type, and results. The results of study suggest that the proposed system can be used to predict client eligibility for loans with an accuracy rate of 70%.

Investigation of Operational Risk Management Quality and Operational Risk Losses: Evidence from Ghana

This study documents the link between the quality of risk management practices and the operating losses of financial institutions in Ghana. Using detailed supervision data, we found that companies with lower risk management practices are higher and more volatile operating losses. We also provided evidence that the strength of risk management practices prior to the 2008-2009 financial crisis have an explanatory power. Losses during the crisis period. Our analysis provides new evidence of the importance of risk management practices to limit risk in financial institutions.

Non-performing loans and monetary policy dynamics in Ghana

PurposeThe sharp rise in non-performing loans (NPLs) with its associated effect on financial institutions in Ghana has become very alarming. This has led to the collapse of distressed institutions and associated repercussions such as loss of private savings, investments, businesses and livelihoods. The purpose of this paper is to test the hypothesis that the monetary policy rate can be used to influence NPLs in Ghana.Design/methodology/approachUsing quarterly data spanning from 2000 to 2016, the authors used the autoregressive distributed lag econometric approach to estimate the effect of monetary policy on the percentage growth of NPLs in Ghana. The results are presented for both short-run and long-run periods.FindingsIn the short run, the authors find evidence of no statistically significant effect of monetary policy on the percentage growth of NPLs. However, in the long run, the authors find a statistically significant effect of monetary policy on the percentage growth of NPLs.Practical implicationsThe authors recommend that policymakers should focus on building a strong financial environment, so that monetary policy can be used to influence the commercial bank’s interest rate. In effect, this will help reduce the growth of NPLs, reduce risk and attract competitors into the financial market, increase asset base, increase credit to support viable ventures and subsequently boost economic growth in Ghana.Originality/valueThe paper shows its value by using quarterly data whereas most literature have considered annual data. Also, the paper includes a policy variable measured by the Monetary Policy Rate (MPR) as the key variable of interest which is normally not the case with most studies.

Corporate Fraud: Causes, Effects, and Deterrence on Financial Institutions in Ghana

This paper focuses on finding the causes, effects, and deterrence and prevention of corporate fraud in the financial institution of Ghana. In particular, we examine the effects of fraud on a firm’s financial performance. A cross sectional model was used to find the effects of financial institutions fraud on financial performance. It was revealed that fraud has a significant negative effects on financial performance i.e. Return on Assets of financial institutions in Ghana. However, structured questionnaires were also used to find out the perception of Accountants, Auditors, and management on the main causes of banking fraud and deterrence and prevention methods in curbing the menace. It was revealed that weaker internal control, inadequate training and fraud policies, failed documents, and proper remuneration are the strong arsenal that causes fraud in financial institutions of Ghana. Moreover, organizational use of password protection, good remuneration, employee’s background checks, and adequate fraud training were perceived as the most deterrence and prevention method in fighting fraud in financial institutions. Our results have practical implication for management, accountants, auditors, and all stakeholders in financial institutions on the effects of fraud on firms financial performance and in mounting fool proof methods in curbing this canker and reducing it to its bearest minimum. The study contributes deterrence and prevention methods aimed at improving its effectiveness in reducing fraud in Ghana and West Africa.

Accountants Perception on Effectiveness of Corporate Fraud Detection and Prevention Methods in Ghana

The purpose of the study is to find out the perceptions of Accountants and Auditors on effectiveness of corporate fraud detection and prevention methods among selected financial Institutions in Ghana. The population samples of the study comprising Accountants and Auditors in a selected financial Institutions in Ghana using a structured survey of questionnaires.It was revealed in the study that, organizational quite utilized data mining, digital analysis, internal Control and improvement and fraud prevention and detection training in combating fraud. However, the findings also shows that, organization use of password protection, Cash Review, Annual Auditing, Whistle blowing policy were less often utilized even though having the highest rating of effectiveness. Accountants, Auditors and management of Financial Organizations should considering using the most effective prevention and detection methods like Cash Review, Annual Auditing, whistle blowing and installation of Password protection on computers based on the findings.The study contributes to the literature on the effectiveness of fraud detection and prevention methods particularly for West African Countries and other emerging nations. The study may be terrific to Practitioners regarding the assessment of the contemporary level of fraud detection and prevention methods on financial Institutions in Ghana and beyond.