IMF Working Papers

Financial Inclusion and Bank Competition in Sub-Saharan Africa

By Azanaw Mengistu, Hector Perez-Saiz

December 7, 2018

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Azanaw Mengistu, and Hector Perez-Saiz. Financial Inclusion and Bank Competition in Sub-Saharan Africa, (USA: International Monetary Fund, 2018) accessed November 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

In this paper we study how competition and financial soundness affect financial inclusion in Sub-Saharan Africa (SSA). We use detailed individual-level survey data, combined with key country-level indicators of bank competition and financial soundness, to study the effect on the adoption of several financial products (bank accounts, credit and debit cards, and bank loans). We find that more competition tends to increase the probability of access to these financial products. On the contrary, we do not find strong evidence of the effect of bank-balance sheet variables (i.e. capital adequacy or liquidity) on borrowing by individuals. Our results may help policy makers design regulations that could improve financial inclusion, which could potentially impact economic growth and long-term economic development.

Subject: Banking, Capital adequacy requirements, Competition, Credit, Financial inclusion, Financial markets, Financial regulation and supervision, Fiscal accounting and reporting, Money, Public financial management (PFM)

Keywords: Accounts, Bank balance-sheet variable, Bank balance-sheet weakness, Bank competition, Bank lending-deposit, Capital adequacy requirements, Competition, Credit, Debit cards, Financial inclusion, Financial soundness, Fiscal accounting and reporting, Global, Lerner index, Liquid asset ratio, Money bank, Sub-Saharan Africa, WP

Publication Details

  • Pages:

    29

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2018/256

  • Stock No:

    WPIEA2018256

  • ISBN:

    9781484386163

  • ISSN:

    1018-5941

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