scholarly journals Financing innovative development of the African economies: the role of digitalization and financial innovations

2020 ◽  
Vol 28 (3) ◽  
pp. 429-439
Author(s):  
Tijani Forgor Alhassan ◽  
Ahou Julie Kouadio ◽  
Dadson Etse Gomado
Keyword(s):  
Financial Development ◽  
Financial Services ◽  
Positive Relationship ◽  
Financial Innovation ◽  
Sub Saharan Africa ◽  
Innovative Development ◽  
Mobile Banking ◽  
Data Set ◽  
Financial Innovations ◽  
Sub Saharan

The article examines the relationship between financial innovation (mobile banking) variables in sub-Saharan Africa. Mobile banking (also known as mobile money) is one of the main financial innovations in the sub-Saharan region, and it is a system through which non-bank residents (residents without bank accounts, etc.) receive financial services. The overall importance of financial innovation in today’s digital and knowledge-based economy, and indeed, innovative development, inspired this study. Using a partial linear regression model, we analysed the International Monetary Fund data set, the World Bank’s national economic data, and mobile banking data from GSMA for the period from 2011 to 2017. A negative correlation was found between these variables and growth, as well as financial development, but a positive relationship was established between financial development and economic development. This positive relationship re-confirms the argument that financial development affects economic growth. It is recommended that policy makers develop and implement the necessary policy tools that can promote this form of financial innovation, and thus link its benefits to the national economy in general.

scholarly journals Problems and prospects of financing innovative development in sub-Saharan African countries

2019 ◽  
Vol 2019 (4) ◽  
pp. 59-67
Author(s):  
Tijani Alhassan
Keyword(s):  
Financial Services ◽  
Financial Integration ◽  
Financial System ◽  
Bank Loans ◽  
Sub Saharan Africa ◽  
Financial Resources ◽  
Innovative Development ◽  
African Countries ◽  
Sub Saharan

The article discusses the place and role of the financial system in the development of national economic systems in developing countries. There have been identified the main func-tions of the financial system: mobilizing financial resources, creating a database of investment projects and investors, monitoring and corporate deposit management, forming a block of information on diversification, transformation and risk management, facilitating the sale of goods through a payment system. The existing approaches to determining the concept of accessibility of financial resources are considered. The role of the financial sector in advancing technological innovations and industrialization in sub-Saharan African countries has been identified. The analysis of reasons for low financial integration, low access to financial services in the shadow economy has been carried out. The main reasons for the lack of access to banking services include the language barrier, lack of simple identification documents or data due to a poorly organized local infrastructure. It is noted that about 52% of the population of sub-Saharan Africa have access to formal financial services; 65% of small, medium and micro-enterprises (90% of the economic sector in Africa) do not have access to bank loans. Research and development expenditures in the economic regions have been systematized. The conclusions have been made about the underdevelopment and lag of infrastructure in sub-Saharan African countries, low availability of financial resources retarding the economic growth and innovative development of small and medium-sized businesses. Possibilities for improving the systems of financial innovative development in the investigated countries have been given.

Banking in Africa

2019 ◽  
pp. 1075-1112
Author(s):  
Thorsten Beck ◽  
Robert Cull ◽  
Patricio Valenzuela
Keyword(s):  
Developing Countries ◽  
Financial Services ◽  
Sub Saharan Africa ◽  
Banking Systems ◽  
Financial Innovations ◽  
The Past ◽  
Current State ◽  
Recent Developments ◽  
Sub Saharan

This chapter takes stock of the current state of banking systems across Sub-Saharan Africa and discusses recent developments, including innovations that might help Africa leapfrog more traditional banking models. Using an array of different data, the chapter documents that African banking systems are shallow but stable. African banks are well capitalized and over-liquid, but lend less to the private sector than banks in non-African developing countries. African enterprises and households are less likely to use financial services than their peers in other developing countries, although there has been significant progress over the past decade. The chapter also describes a number of financial innovations across the continent that can help overcome different barriers to financial inclusion and have helped to expand the bankable and the banked population. The chapter ends with discussing current challenges for policymakers and academics, including the lack of (data on) long-term finance and the supervisory challenges stemming from increasing cross-border banking in the region.

Do microsavings stimulate financial performance of microfinance institutions in Sub-Saharan Africa?

2018 ◽  
Vol 45 (5) ◽  
pp. 1072-1087 ◽  
Author(s):  
Sydney Chikalipah
Keyword(s):  
Financial Performance ◽  
Financial Services ◽  
Information Exchange ◽  
Empirical Relationship ◽  
Policy Implications ◽  
Sub Saharan Africa ◽  
Microfinance Institutions ◽  
Data Set ◽  
Content Type ◽  
Sub Saharan

Purpose The purpose of this paper is to investigate the empirical relationship between microsavings and the financial performance of microfinance institutions (MFIs) in Sub-Saharan Africa (SSA). Design/methodology/approach The approach in this paper is decidedly empirical, and employs data obtained from Microfinance Information eXchange (MIX). The data set consists of 350 microfinance MFIs domiciled in 36 Sub-Saharan African countries for the period covering 1998–2012. Findings The panel estimation results consistently show that there exists a negative and statistically significant relationship between microsavings and the financial performance of MFIs in SSA. This is perhaps surprising, albeit rational considering the exceedingly elevated operating expenses that ascend from mobilizing and managing microsavings, ceteris paribus, that could erode firm profitability. The paper draws policy implications from these important findings. Research limitations/implications Even though generalized method of moment estimation technique was employed and robustness checks, the issue of endogeneity cannot be eliminated entirely. Practical implications Microfinance industry is one of the fastest growing segments of the financial sector in SSA. The industry is increasingly becoming the core of financial inclusion in the region where two-thirds of the adult population lack access to formal financial services. Therefore, gaining an in-depth understanding of the role microsavings play in the financial performance of MFIs can contribute to the growth of the industry. Originality/value This study is timely considering the significant growth in the number of microsavings – there are currently twice as many microsavings accounts in SSA as there are microcredits. More importantly, based on 400 MFIs, that reported data to MIX in 2016, the total microsavings stood at about US$11bn against an aggregate loan portfolio of about US$10.5bn. The remarkable growth of microsavings in SSA, from less than US$100m in 2000 to US$11bn in 2016, is the main motivation of undertaking this study.

Determinants of portfolio equity flows to Sub-Saharan Africa

2016 ◽  
Vol 7 (4) ◽  
pp. 446-461 ◽  
Author(s):  
Eric Osei-Assibey ◽  
Seth Obeng Adu
Keyword(s):  
Least Squares ◽  
Financial Development ◽  
Positive Relationship ◽  
Trade Openness ◽  
Political Stability ◽  
Financial Sector ◽  
Generalized Least Squares ◽  
Data Set ◽  
Content Type ◽  
Sub Saharan

Purpose The purpose of this paper is to investigate the determinants of portfolio equity flows to the Sub-Saharan African (SSA) region over the period 1996-2010. Design/methodology/approach The study uses a sample of 14 SSA countries to estimate the baseline regression through employing the system generalized methods of moment dynamic panel estimation framework. To check the robustness of the estimation results, the study further analyses the data set using the random effects-generalized least squares (EGLS) estimator. The Random effects-generalized least squares estimator is also referred to a the Estimated Generalized least Squares (EGLS) estimator. Findings The paper finds a significant positive relationship between financial development and portfolio equity flows. Furthermore, while the study surprisingly finds trade openness to have a significant negative relationship, political stability is found to have a significant positive relationship with portfolio equity. To check for the robustness of these results, the authors further analyse the data set using the random EGLS estimator. The result of the EGLS estimator confirms that there is a robust positive relationship between financial development and portfolio equity flows to SSA. However, the results suggest that neither trade openness nor political stability is a robust determinant of portfolio equity flows to the sub-region. Practical implications Policy measures should aim at enhancing financial sector development, political stability and rule of law. A transparent judicial system that enhances rule of law and deepens democratic governance in countries in the sub-region is critical, but even more critical is deepening the financial sector, given the important role financial development plays in portfolio equity flows as suggested by the findings. A range of measures and appropriate policy responses are therefore needed for countries that have to manage macroeconomic and financial stability risks to deepen the financial sector. Originality/value Most studies on private capital flows to SSA have focussed on foreign direct investment flows with no or scanty evidence on the drivers of portfolio equity flows. This study fills this gap in the literature.

scholarly journals Financial Inclusion, Income Inequality and Sustainable Economic Growth in Sub-Saharan African Countries

2021 ◽  
Vol 13 (4) ◽  
pp. 1780
Author(s):  
Chima M. Menyelim ◽  
Abiola A. Babajide ◽  
Alexander E. Omankhanlen ◽  
Benjamin I. Ehikioya
Keyword(s):  
Economic Growth ◽  
Income Inequality ◽  
Financial Services ◽  
Sub Saharan Africa ◽  
Kuznets Curve ◽  
African Countries ◽  
Financial Access ◽  
Sub Saharan ◽  
Sustainable Economic Growth ◽  
The Impact

This study evaluates the relevance of inclusive financial access in moderating the effect of income inequality on economic growth in 48 countries in Sub-Saharan Africa (SSA) for the period 1995 to 2017. The findings using the Generalised Method of Moments (sys-GMM) technique show that inclusive financial access contributes to reducing inequality in the short run, contrary to the Kuznets curve. The result reveals a negative effect of financial access on the relationship between income inequality and economic growth. There is a positive net effect of inclusive financial access in moderating the impact of income inequality on economic growth. Given the need to achieve the Sustainable Development Targets in the sub-region, policymakers and other stakeholders of the economy must design policies and programmes that would enhance access to financial services as an essential mechanism to reduce income disparity and enhance sustainable economic growth.

scholarly journals National Culture and Africa Revisited: Ethnolinguistic Group Data From 35 African Countries

2019 ◽  
Vol 54 (1) ◽  
pp. 73-91 ◽  
Author(s):  
Bert van Pinxteren
Keyword(s):  
Survey Data ◽  
National Culture ◽  
Cultural Psychology ◽  
Sub Saharan Africa ◽  
African Countries ◽  
Data Set ◽  
Group Data ◽  
Sub Saharan ◽  
National Boundaries ◽  
Ethnolinguistic Group

Africa is a continent of considerable cultural diversity. This diversity does not necessarily run in parallel to the national boundaries that were created in Africa in the colonial period. However, decades of nation building in Africa must have made their mark. Is it possible nowadays to distinguish national cultures in Africa, or are the traditional ethnolinguistic distinctions more important? This article uses an approach developed in cross-cultural psychology to examine these questions. In 2012, Minkov and Hofstede published an article in this journal analyzing World Values Survey data from seven countries in Sub-Saharan Africa at the level of subnational administrative regions. They argued that national culture is also a meaningful concept in this region. This study reexamines the matter. It uses an innovative approach, looking at ethnolinguistic groups instead of at administrative regions and using the much more extensive Afrobarometer survey data set. It finds that although the Minkov/Hofstede study still has merit, the picture is more nuanced in several important ways. There is not one pattern that adequately describes the situation in the whole of Africa.1

scholarly journals THE ROLE OF FINANCIAL DEVELOPMENT AND INSTITUTIONAL QUALITY ON ENVIRONMENTAL SUSTAINABILITY IN SUB-SAHARAN AFRICAN COUNTRIES

2018 ◽  
Vol 6 (9) ◽  
pp. 156-177
Author(s):  
Aliyu Alhaji Jibrilla
Keyword(s):  
Financial Development ◽  
Environmental Sustainability ◽  
Carbon Dioxide Emissions ◽  
Early Stage ◽  
Institutional Quality ◽  
Environmental Conservation ◽  
Sub Saharan Africa ◽  
African Countries ◽  
Pooled Mean Group ◽  
Sub Saharan

This study addresses the question of financial development and institutional quality influence on the environmental sustainability of some 13 countries from the sub-Saharan Africa. Relying upon pooled mean group (PMG) for panel data, we provide evidence which suggest that both financial development and institutional quality are statistically significant determinants of per capita carbon dioxide emissions in the region. More specifically, we found that without healthy institutions and sound financial system sub-Saharan African countries might not avoid environmental degradation experienced by advanced nations during their early stage of economic progress. Our results also support the EKC hypothesis in the region.  In addition, the paper also shows that more openness to FDI inflows is good for the environment across the SSA. These findings suggest the need for institutional and financial service reform that supports robust environmental conservation.

scholarly journals The Nexus between Financial Development and Economic Growth: Panel Data Evidence from Developing Countries

2021 ◽  
Vol 14 (10) ◽  
pp. 489
Author(s):  
E. M. Ekanayake ◽  
Ranjini Thaver
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Panel Data ◽  
Least Squares ◽  
Financial Development ◽  
Panel Cointegration ◽  
Sub Saharan Africa ◽  
Explanatory Variables ◽  
Cointegration Tests ◽  
Sub Saharan

The objective of this study is to investigate the nexus between financial development (FD) in economic growth (GROWTH) in developing countries. The study uses panel data from 138 developing countries during the period 1980–2018. The relationship between financial development and economic growth is investigated using four explanatory variables that are commonly used to measure the level of financial development and several other control variables, including a dummy variable representing the financial and banking crises. The sample of 138 developing countries is also classified into six geographic regions. We have carried out panel unit-root tests and panel cointegration tests before estimating the specified models using both Panel Least Squares (Panel LS) and Panel Fully Modified Least Squares (FMOLS) methods. In addition, panel Granger causality tests have been conducted to identify the direction of causality between FD and GROWTH for each of the regions. The results of the study provide evidence of a direct relationship between FD and GROWTH in developing countries. Furthermore, there is evidence of bi-directional causality running from FD to GROWTH and from GROWTH to FD in samples of Europe and Central Asia, South Asia, and all countries, but not in East Asia and Pacific, Latin America and the Caribbean, Middle East and North Africa, and Sub-Saharan Africa.

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