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What Influences Banks Lending in Sub-Saharan Africa?

Author

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  • Mohammed Amidu

    (Mohammed Amidu, University of Ghana Business School, P.O. Box LG 78, Legon, Accra. E-mail: amidu@ug.edu.gh)

Abstract

This article analyses the broad determinants of bank lending in Sub-Saharan Africa (SSA) using both micro-bank and macro-country level data of 264 banks across 24 SSA countries. The core finding is that the structure of banking markets influences credit delivery in SSA in an environment where the financial sector is reformed and banks are allowed to operate freely. Also, there is an evidence to suggest a link between bank credit and the financial strength of the banks. The overall results suggest that regulatory initiative, which restricts banking activities, imposes severe entry requirements and requires high regulatory capital, influences banks’ decisions to supply loans. JEL Classification: E52, G21, G28, N27

Suggested Citation

  • Mohammed Amidu, 2014. "What Influences Banks Lending in Sub-Saharan Africa?," Journal of Emerging Market Finance, Institute for Financial Management and Research, vol. 13(1), pages 1-42, April.
    • Handle: RePEc:sae:emffin:v:13:y:2014:i:1:p:1-42
    DOI: 10.1177/0972652714534022
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    References listed on IDEAS

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    Cited by:

    1. Mohammed Amidu & Simon K. Harvey, 2016. "The persistence of profits of banks in Africa," Review of Quantitative Finance and Accounting, Springer, vol. 47(1), pages 83-108, July.
    2. Almir ALIHODŽIĆ & İbrahim Halil EKŞİ, 2018. "Credit growth and non-performing loans: evidence from Turkey and some Balkan countries," Eastern Journal of European Studies, Centre for European Studies, Alexandru Ioan Cuza University, vol. 9, pages 229-249, December.

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    More about this item

    Keywords

    Bank lending; government policy and regulation; Sub-Saharan Africa;
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • N27 - Economic History - - Financial Markets and Institutions - - - Africa; Oceania

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