Can the Financial Sector Deliver Both Growth and Financial Stability in Sub-Saharan Africa?

2015 ◽  
pp. 197-229 ◽  
Author(s):  
Stephany Griffith-Jones ◽  
Ewa Karwowski
Keyword(s):  
Financial Stability ◽  
Financial Sector ◽  
Sub Saharan Africa ◽  
Sub Saharan

Savings-investment-financial development trilogy: evidence from SSA

2017 ◽  
Vol 9 (1) ◽  
pp. 20-33
Author(s):  
Ibrahim D. Raheem ◽  
Mutiu Abimbola Oyinlola
Keyword(s):  
Financial Development ◽  
Quantitative Measure ◽  
Financial Sector ◽  
Sub Saharan Africa ◽  
Content Type ◽  
Qualitative Nature ◽  
Sub Saharan ◽  
Generalised Method Of Moments ◽  
Qualitative Measure

Purpose The study seeks to examine the role of financial development (FD) in the Feldstein–Horioka (FH) puzzle. The novelty of this study is based on the fact that the measures of FD are expanded to account for the qualitative nature of the financial sector (“better finance”). Design/methodology/approach The study used annual dataset for 37 countries in sub-Saharan Africa (SSA) for the period 1999 through 2010 and relied on the system generalised method of moments (GMM) technique, which takes accounts of endogeneity-related issues. Findings The estimated FH coefficients ranged between 0.419 and 0.720. The qualitative measures of FD have higher FH coefficient relative to the traditional or quantitative measure of FD (“more finance”). Hence, improvement in both the quantity and quality of the financial sector might be helpful in the mobilization, distribution and utilization of savings for investment purposes within these economies. The high FH coefficients obtained suggest that the FH puzzle does not hold in the SSA region. Practical implications Policymakers should formulate and design policies that would seek to ensure the development of the financial sector both in terms of quantity and quality. While taking this into consideration, special attention should be devoted to the qualitative measure of finance. Originality/value The study extends the work of Adeniyi and Egwaikhide (2013) by providing different and, possibly better proxies for FD to capture the efficiency and the qualitative nature of the financial system. This crux of the study serves as the value addition to the literature, as no other study the authors are aware of, has considered the importance of “better finance” indicators in the saving – investment nexus investigation.

scholarly journals The Effect of Financial Sector Development on Economic Growth of Selected Sub-Saharan African Countries

2020 ◽  
Vol 23 (2) ◽  
Author(s):  
Dagim Tadesse Bekele ◽  
Adisu Abebaw Degu
Keyword(s):  
Economic Growth ◽  
Panel Data ◽  
Private Sector ◽  
Financial Institutions ◽  
Adult Population ◽  
Financial Sector ◽  
Dynamic Panel Data ◽  
Sub Saharan Africa ◽  
Financial Sector Development ◽  
Sub Saharan

Finance-growth nexus is among the main debatable issue in economics and policymaking. So, this research tried to look at the effect of financial sector development on the economic growth of 25 sub-Saharan Africa countries by using panel data for time 2010-2017. Precisely, three dynamic panel data models which look the effect of financial sector depth, access and efficiency on economic growth were estimated by two-step system GMM estimation. In this research, credit extended to the private sector per GDP, commercial bank branch per 100,000 adult population, and Return to assets were used as a proxy for financial sector depth, access, and efficiency, respectively. Accordingly, the results revealed financial sector depth, access, and efficiency have a positive and statistically significant effect on the economic growth of these countries.  It is therefore recommended for the concerned bodies that broadening the depth of financial institutions by giving more credit for the private sector is essential. Besides, the financial institutions will have to be expanded to increase their accessibility to the mass and have to take some measures which promote their efficiency. 

The nexus between foreign bank presence and credit to the private sector: evidence from Sub-Saharan Africa

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Vera Fiador ◽  
Lordina Amoah ◽  
Emmanuel Abbey
Keyword(s):  
Private Sector ◽  
Fixed Effects ◽  
Financial Integration ◽  
Financial Sector ◽  
Foreign Bank ◽  
Sub Saharan Africa ◽  
Content Type ◽  
Access To Credit ◽  
Sub Saharan ◽  
The Impact

PurposeThe purpose of the study is to explore the implications of global financial integration on host economies in Sub-Saharan Africa (SSA). The study tests the competing views on the impact of foreign bank penetration on private sector access to credit in developing host economies.Design/methodology/approachUsing data on a panel 25 SSA economies over a period of 22 years from 1995 to 2016, the study employs fixed effects and Prais-Winsten estimations as well as generalized methods of moments (GMM) to test the foreign bank impact.FindingsThe findings show support for the hypothesis that global financial integration has positive implications for participating economies. In other words, financial sector liberalization and deregulation leading to the influx of foreign banks has positive implications for access to credit by the private sector in SSA economies. The study also finds other standard determinants of access to credit like lending rate and broad money supply conforming to the existing literature in terms of impact.Originality/valueOverall, the findings hold relevant implications for banking sector policies and the financial sector in general regarding the priority that policy makers and advisors attach to reforming financial sector policies.

Analysis of the Performance of Microfinance Institutions in Sub-Saharan Africa

2022 ◽  
pp. 188-206
Author(s):  
Lawrence Jide Jones-Esan
Keyword(s):  
Economic Growth ◽  
Small And Medium Enterprises ◽  
Relevant Literature ◽  
Financial Sector ◽  
Sub Saharan Africa ◽  
Microfinance Institutions ◽  
Sub Saharan ◽  
Industrial Crisis ◽  
Medium Enterprises

This chapter examines the performance of microfinance institutions in Sub-Saharan Africa through observations from different perspectives. It examined the effects of microfinance institutions in Sub-Saharan Africa. Relevant literature on the sustainability and outreach of microfinance institutions are also analysed in this chapter. Sub-Saharan Africa's future achievement of necessary economic growth is very likely to depend partly on its ability to develop its economic and financial sectors to be more inclusive of small and medium enterprises in a more comprehensive way. Currently, microfinance directly promotes the development of the intermediate financial sector in Africa, which is positively correlated with economic growth. Despite the worsening of the current industrial crisis, microfinance is seen as an essential developmental tool and continues to grow in Sub-Saharan Africa.

scholarly journals Drivers of Financial Access

2020 ◽  
Vol 20 (74) ◽  
Author(s):  
Corinne Deléchat ◽  
Lama Kiyasseh ◽  
Margaux MacDonald ◽  
Rui Xu
Keyword(s):  
Low Income ◽  
Financial Services ◽  
Financial Stability ◽  
Sub Saharan Africa ◽  
Low Income Countries ◽  
Financial Access ◽  
Country Level ◽  
Macroprudential Policies ◽  
Sub Saharan ◽  
Emerging And Developing Countries

This study analyzes the drivers of the use of formal vs. informal financial services in emerging and developing countries using the 2017 Global FINDEX data. In particular, we investigate whether individuals’ choice of financial services correlates with macro-financial and macro-structural policies and conditions, in addition to individual and country characteristics. We start our analysis on middle and low-income countries, and then zoom in on sub-Saharan Africa, currently the region that most relies on informal financial services, and which has the largest uptake of mobile banking. We find robust evidence of an association between macroprudential policies and individuals’ choice of financial access after controlling for personal and country-level characteristics. In particular, macroprudential policies aimed at controlling credit supply seem to be associated with greater resort to informal financial services compared with formal, bank-based access. This highlights the importance for central bankers and financial sector regulators to consider the potential spillovers of monetary policy and financial stability measures on financial inclusion.

Sign in / Sign up

Export Citation Format

Share Document