Ties That Bind? Financial Inclusion and Relational Obligations in Accra, Ghana

A new spate of financial inclusion initiatives across the developing world aims at “banking the unbanked,” promoted both by large international aid organizations like the Gates Foundation and smaller entrepreneurs attempting to corner the market for low-income loans in developing countries (Dwoskin 2015). Although these initiatives portray their task as the straightforward extension of savings and loans to poor borrowers, they face a more difficult task than simply registering new bank accounts: they must contend with a social context where individuals’ personal finance decisions are driven as much by concepts of personal obligation and responsibility as by concerns about personal economic advancement. Using survey and interview data from Ghana, a lower-middle-income African country where the majority of the population still remains “unbanked,” I illustrate how the formal credit system interacts with traditional ideas about social obligation to guide Ghanaians’ saving and borrowing behavior. Facing commercial interest rates of 30-35%, most Ghanaians have traditionally relied on either personal savings or family and friends to finance investments like land, property, or education. With a limited state welfare system, relationships of patronage and dependency provide necessary resources for poorer citizens. According to traditional norms, personal liquidity brings the obligation to redistribute: money should be shared if it is not specifically “earmarked” for something, and having “extra” cash while a friend or relative is in need is considered immoral. I argue that these norms of obligation interact with new ideas about credit, savings and liquidity in two ways. On the one hand, many Ghanaians using the formal credit market for the first time continue to interpret formal financial products in terms of obligation and morality: even many high-income respondents consider banks “immoral” if they do not extend credit to needy but responsible applicants. On the other hand, some upper and middle-income Ghanaian respondents use the increasing availability of formal financial services to manage and defer their traditional obligations to friends and family members, arguing that it is no longer prohibitively expensive for those relations to seek help from a bank or microfinance institution. I conclude by suggesting that new initiatives to promote formal financial services may effect a greater transformation than simply making money more accessible, by gradually changing ideas about what kind of economic assistance is appropriate between personal relations.