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The deconcentration of banking systems in Sub-Saharan Africa

Author

Listed:
  • Luc Jacolin
  • Alphonse Noah

    (EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique)

Abstract

This study brings to light a deconcentration of the banking systems of sub-Saharan African countries (SSA) over the period 2005-2015, in parallel with the rapid economic development of the continent during the super-cycle of rising commodity prices and the emergence of pan-African banking groups. The authors' analysis shows that this trend is influenced, among other things, by the size of the market, the degree of international openness and the entry or exclusion of foreign banks. In addition, the lower the level of banking concentration, the higher the loan outstandings (as a percentage of GDP), which suggests that the level of competition between banks has a positive impact on credit distribution. However, banking concentration is only weakly linked to the quality of bank portfolios.

Suggested Citation

  • Luc Jacolin & Alphonse Noah, 2017. "The deconcentration of banking systems in Sub-Saharan Africa," Post-Print hal-01666745, HAL.
    • Handle: RePEc:hal:journl:hal-01666745
    as

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    References listed on IDEAS

    as
    1. Inessa Love & María Soledad Martínez Pería, 2015. "How Bank Competition Affects Firms' Access to Finance," The World Bank Economic Review, World Bank, vol. 29(3), pages 413-448.
    2. Chauvet, Lisa & Jacolin, Luc, 2017. "Financial Inclusion, Bank Concentration, and Firm Performance," World Development, Elsevier, vol. 97(C), pages 1-13.
    3. Anne-Marie Geourjon & Samuel Guérineau & Patrick Guillaumont & Sylviane Guillaumont Jeanneney, 2013. "Intégration régionale pour le développement en Zone franc," Post-Print halshs-00908217, HAL.
    4. Jean Arcand & Enrico Berkes & Ugo Panizza, 2015. "Too much finance?," Journal of Economic Growth, Springer, vol. 20(2), pages 105-148, June.
    5. Louzis, Dimitrios P. & Vouldis, Angelos T. & Metaxas, Vasilios L., 2012. "Macroeconomic and bank-specific determinants of non-performing loans in Greece: A comparative study of mortgage, business and consumer loan portfolios," Journal of Banking & Finance, Elsevier, vol. 36(4), pages 1012-1027.
    6. Fofack, Hippolyte L., 2005. "Nonperforming loans in Sub-Saharan Africa : causal analysis and macroeconomic implications," Policy Research Working Paper Series 3769, The World Bank.
    7. Enrico Berkes & Ugo Panizza & Jean Louis Arcand, 2015. "Too Much Finance or Statistical Illusion: A Comment," IHEID Working Papers 12-2015, Economics Section, The Graduate Institute of International Studies.
    8. Thorsten Beck & Lemma Senbet & Witness Simbanegavi, 2015. "Financial Inclusion and Innovation in Africa: An Overview," Journal of African Economies, Centre for the Study of African Economies, vol. 24(suppl_1), pages 3-11.
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    Cited by:

    1. Brei, Michael & Jacolin, Luc & Noah, Alphonse, 2020. "Credit risk and bank competition in Sub-Saharan Africa," Emerging Markets Review, Elsevier, vol. 44(C).

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    More about this item

    Keywords

    Bank concentratio; Sub-Saharan Africa; HHI; Franc zone;
    All these keywords.

    JEL classification:

    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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