What Influences Banks' Lending in Sub-Saharan Africa?
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Date
2014-03
Authors
Amidu, Mohammed
Journal Title
Journal ISSN
Volume Title
Publisher
AERC
Abstract
Banking literature, especially those on the developing economies, has not emphasized
the link between macroeconomic activities, monetary policy, bank market structure,
bank specific condition, and the supply of bank loans. This study employs dynamic
panel data techniques to investigate the broad determinants of lending behaviour of
264 banks across 24 sub-Saharan Africa (SSA) countries. The results show that the
market structure of banks influences credit delivery in SSA in an environment where
the financial sector is reformed and banks are allowed to operate freely. More so, there
is evidence to suggest a link between bank credit and the financial strength of the banks.
The study further reveals that, regulatory initiative, which restricts banking activities,
imposes severe entry requirements and requires high regulatory capital, and influences
banks’ decisions to supply loans.
Description
HG 1642. a357 2014
Keywords
Africa sub - Saharan , Bank loans , Economic development , Government policy and regulations , Bank lending