Svetlana Andrianova, Badi H. Baltagi, Panicos O. Demetriades, David Fielding|
University of Leicester|
Why do African Banks Lend so Little?
Public|
Printed: Yes
This paper seeks to explain why African banks lend comparatively less than other banks across the globe. Data shows that loan defaults prevent banks from lending under a poor regulatory environment. Once a threshold regulatory level has been reached, further regulatory improvement and decreased default rates are unimportant in influencing the lending of banks. The authors predict this is due to unchecked moral hazards or adverse selection.
Themes
State owned Financial Institutions
Region
Sub-Saharan Africa
