Financial Inclusion, Agricultural Land Ownership, and Investment Decisions

Considering the impediments in access to agricultural lands and tenure insecurity, which negatively impact food insecurity and rural poverty levels, there is a need to understand how financial inclusion can improve land ownership, tenure security, and investment decisions. This chapter explores the empirical linkages between financial inclusion, agricultural land ownership, tenure security, and investment decisions based on data from the seventh round of the Ghana Living Standard Survey. Correcting for endogeneity in financial inclusion, we find that household heads who are financially included are more likely to own land with deeds, have security of tenure over the land, and invest in livestock and agricultural equipment. The results are robust to different measures of financial inclusion. Results of the heterogeneity analysis suggest that financial inclusion is more effective in increasing land ownership and investment decisions among male- and adult-headed households. However, financially included youth-headed households are more likely to invest in agricultural equipment than adult-headed households. Policies that aim at achieving universal financial access must be vigorously pursued and sustained.