Behavioral Determinants of Financial Inclusion in Ethiopia: Evidence from Kaffa Zone

Abstract

Financial inclusion is defined as the process that ensures the ease of access, availability, and usage of formal financial system for all members of an economy. Financial inclusion is important for sustainable economic growth and the improvement of social well-being. The main objective of this study was to examine behavioral determinants of financial inclusion in Kaffa zone. To achieve this objective the study used disruptive and explanatory research design. The source of data for this study was primary source which was collected from respondents through structured questionnaire. The study’s target population was composed of individuals above the age of 18 in kaffa zone. To select a sample respondent multiple stage sampling technique was used and Data was collected from a total of 374 actual respondents / from three woredas and one town was used. This data was entered in to SPSS (satirical package for social science) and analyzed descriptive and inferential statics’. The study used Binary Logistic Regression model. From this the study results revealed that financial attitude, financial literacy, subjective norm and the combination of the personal and societal factors significantly and positively contributed to an individual’s financial inclusion in the study area. The results further revealed that social network have no significant effect on financial inclusion. The study recommended the following for concerned bodies. Education should be enhanced to increase financial knowledge of citizens this also affect financial inclusion. And also policy makers need to design financial inclusion policies and adopt strategies and financial institutions should need to continuously design financial literacy programs among the distinct income segment and location