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Measuring Financial Development in Sub-Saharan Africa

Author

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  • Enrique A Gelbard
  • Sérgio Pereira. Leite

Abstract

This study introduces an index for measuring financial development and a set of six indices representing key characteristics of the financial systems in 38 sub-Saharan African countries. The results show that these countries have made good progress in improving and modernizing their financial systems during the last decade, particularly with regard to financial liberalization and the adoption of indirect instruments of monetary policy. In many countries, however, the range of financial products remains extremely limited, interest rate spreads are wide, capital adequacy ratios are insufficient, judicial loan recovery is a problem, and the share of nonperforming loans is large.

Suggested Citation

  • Enrique A Gelbard & Sérgio Pereira. Leite, 1999. "Measuring Financial Development in Sub-Saharan Africa," IMF Working Papers 99/105, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:99/105
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    Citations

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    Cited by:

    1. Ross Levine & Norman Loayza & Thorsten Beck, 2002. "Financial Intermediation and Growth: Causality and Causes," Central Banking, Analysis, and Economic Policies Book Series,in: Leonardo Hernández & Klaus Schmidt-Hebbel & Norman Loayza (Series Editor) & Klaus Schmidt-Hebbel (Se (ed.), Banking, Financial Integration, and International Crises, edition 1, volume 3, chapter 2, pages 031-084 Central Bank of Chile.
    2. Poonam Gupta & Thierry Tressel & Enrica Detragiache, 2005. "Finance in Lower Income Countries; An Empirical Exploration," IMF Working Papers 05/167, International Monetary Fund.
    3. Abdullahi Ahmed & Enjiang Cheng & George Messinis, 2011. "The role of exports, FDI and imports in development: evidence from Sub-Saharan African countries," Applied Economics, Taylor & Francis Journals, vol. 43(26), pages 3719-3731.
    4. AL-ZUBI, Khaled & AL-RJOUB,Samer & ABU-MHAREB,E, 2006. "Financial Development And Economic Growth: A New Empirical Evidence From The Mena Countries, 1989-2001," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 6(3).
    5. Ephraim W. Chirwa & Montfort Mlachila, 2002. "Financial Reforms and Interest Rate Spreads in the Commercial Banking System in Malawi," IMF Working Papers 02/6, International Monetary Fund.
    6. Raju Jan Singh & Yifei Huang, 2015. "Financial Deepening, Property Rights, and Poverty: Evidence from Sub-Saharan Africa," Journal of Banking and Financial Economics, University of Warsaw, Faculty of Management, vol. 1(3), pages 130-151, May.
    7. International Monetary Fund, 2004. "Financial Sector Development in the Middle East and North Africa," IMF Working Papers 04/201, International Monetary Fund.
    8. Lucía Cuadro Sáez & Sonsoles Gallego Herrero & Alicia García Herrero, 2003. "Why Do Countries Develop More Financially Than Others? The Role Of The Central Bank And Banking Supervision," Finance 0304006, EconWPA.
    9. Léonce Ndikumana, 2003. "Capital Flows, Capital Account Regimes, and Foreign Exchange Rate Regimes in Africa," Working Papers wp55, Political Economy Research Institute, University of Massachusetts at Amherst.
    10. Ahmed, Abdullahi D. & Suardi, Sandy, 2009. "Macroeconomic Volatility, Trade and Financial Liberalization in Africa," World Development, Elsevier, vol. 37(10), pages 1623-1636, October.
    11. Peter Lawrence, 2006. "Finance and development: why should causation matter?," Journal of International Development, John Wiley & Sons, Ltd., vol. 18(7), pages 997-1016.
    12. Ahmed, Syed & Horner, James & Rafiq, Rafiqul Bhuyan, 2008. "Financial Development and Economic Growth: Experiences of Selected Developing Economies," Review of Applied Economics, Review of Applied Economics, vol. 4(1-2).
    13. Arto Kovanen, 2004. "Zimbabwe; A Quest for a Nominal Anchor," IMF Working Papers 04/130, International Monetary Fund.
    14. Kabango, Grant P. & Paloni, Alberto, 2011. "Financial Liberalization and the Industrial Response: Concentration and Entry in Malawi," World Development, Elsevier, vol. 39(10), pages 1771-1783.
    15. Léonce Ndikumana, 2001. "Financial Markets and Economic Development in Africa," Working Papers wp17, Political Economy Research Institute, University of Massachusetts at Amherst.
    16. Irving, Jacqueline & Manroth, Astrid, 2009. "Local sources of financing for infrastructure in Africa : a cross-country analysis," Policy Research Working Paper Series 4878, The World Bank.

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