Title

Financial Inclusion in Sub - Saharan Africa: Pan - African Banks vs Developed Country Banks

Abstract/Description

Sub-Sahara African economy is moving towards a road-map of financial integration where many Pan-African banks have established subsidiaries in other African countries. After the financial crisis of 2007/08, major foreign banks from developed countries retreated and that gave room to Pan-African banks to expand their operations in the region. The paper explores if the increase in the share of Pan-African banks, after the financial crisis, has been instrumental in easing out the access to finance for firms as compared to foreign banks from developed countries through a Probit model. The situation of the access to finance is being analyzed before and after the financial crisis of 2007/8. It has been found that Pan-African banks have quite beneficial for the firms where there is a larger share of these banks whereas the developed country banks cater to the borrowing needs of large and well-established firms. For the overall financial stability and development of the economy, access to finance and financial inclusion of firms at all levels would be beneficial for the overall health of the economy. The whole process of financial integration would have its benefits for the region but it will be associated with risks that need to be catered with proper mechanisms and regulations to protect it from external and internal shocks.

Session Theme

Economic Uncertainty and Financial Inclusion - Session IB

Session Type

Parallel Technical Session

Session Chair

Dr. Farooq Arby, Director Research, State Bank of Pakistan

Session Discussant

Dr. Ashraf Khan, Assistant Professor, Institute of Business Administration, Karachi

Start Date

2-4-2021 2:30 PM

End Date

2-4-2021 4:00 PM

This document is currently not available here.

Share

COinS
 
Apr 2nd, 2:30 PM Apr 2nd, 4:00 PM

Financial Inclusion in Sub - Saharan Africa: Pan - African Banks vs Developed Country Banks

Sub-Sahara African economy is moving towards a road-map of financial integration where many Pan-African banks have established subsidiaries in other African countries. After the financial crisis of 2007/08, major foreign banks from developed countries retreated and that gave room to Pan-African banks to expand their operations in the region. The paper explores if the increase in the share of Pan-African banks, after the financial crisis, has been instrumental in easing out the access to finance for firms as compared to foreign banks from developed countries through a Probit model. The situation of the access to finance is being analyzed before and after the financial crisis of 2007/8. It has been found that Pan-African banks have quite beneficial for the firms where there is a larger share of these banks whereas the developed country banks cater to the borrowing needs of large and well-established firms. For the overall financial stability and development of the economy, access to finance and financial inclusion of firms at all levels would be beneficial for the overall health of the economy. The whole process of financial integration would have its benefits for the region but it will be associated with risks that need to be catered with proper mechanisms and regulations to protect it from external and internal shocks.