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Analysis of the Determinants of Bank Lending to Businesses - The Case of Commercial Banks in the WAEMU

Author

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  • Ngadiary Diouf
  • Mohamed Lamine Mbengue

    (Gaston Berger University, Senegal)

Abstract

We study how banking characteristics and their interaction with external shocks affect credit supply in West African Economic and Monetary Union (WAEMU) countries. A static and dynamic panel model is used on 66 banks between 2005 and 2021. The results show that capital, credit risk and securities portfolio inhibit lending activity, while liquidity favors its expansion. In addition, larger, more liquid and profitable deposit-taking banks are less affected by external shocks, while less capitalized banks are more sensitive. We recommend prudent management to ensure the sector's stability and resilience.

Suggested Citation

  • Ngadiary Diouf & Mohamed Lamine Mbengue, 2025. "Analysis of the Determinants of Bank Lending to Businesses - The Case of Commercial Banks in the WAEMU," Review of Development Finance Journal, Chartered Institute of Development Finance, vol. 15(1), pages 54-68.
    • Handle: RePEc:afj:journ3:v:15:y:2025:i:1:p:54-68
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    File URL: https://journals.co.za/doi/abs/10.10520/ejc-rdfin_v15_n1_a5
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    More about this item

    Keywords

    Lending behavior; Monetary policy; Panel model; WAEMU;
    All these keywords.

    JEL classification:

    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G29 - Financial Economics - - Financial Institutions and Services - - - Other

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