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The Effect of Reducing Information Asymmetry on Loan Price and Quantity in the African Banking Industry

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  • Asongu, Simplice

Abstract

The purpose of this study is to assess how information sharing offices affect loan price and quantity in the African banking industry. The empirical evidence is based on a panel of 162 banks in 42 countries for the period 2001-2011. From the Generalised Method of Moments, public credit registries decrease loan price. With instrumental Quantile Regressions, two main findings are established. Public credit registries consistently decrease the price of loans whereas private credit bureaus consistently have the opposite effect. Public credit registries increase loan quantity in bottom quintiles (or banks associated with lower loan quantities) while private credit bureaus increase loan quantity in top quintiles (or banks associated with higher loan quantities).

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  • Asongu, Simplice, 2017. "The Effect of Reducing Information Asymmetry on Loan Price and Quantity in the African Banking Industry," MPRA Paper 80649, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:80649
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    3. Kusi, Baah Aye & Agbloyor, Elikplimi Komla & Gyeke-Dako, Agyapomaa & Asongu, Simplice Anutechia, 2020. "Financial Sector transparency and net interest margins: Should the private or public Sector lead financial Sector transparency?," Research in International Business and Finance, Elsevier, vol. 54(C).
    4. Simplice A. Asongu & Nicholas M. Odhiambo, 2019. "Size, efficiency, market power, and economies of scale in the African banking sector," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 5(1), pages 1-22, December.
    5. Simplice A. Asongu & Paul N. Acha-Anyi, 2017. "ICT, conflicts in financial intermediation and financial access: evidence of synergy and threshold effects," Netnomics, Springer, vol. 18(2), pages 131-168, December.
    6. Machokoto, Michael & Areneke, Geofry, 2020. "Does innovation and financial constraints affect the propensity to save in emerging markets?," Research in International Business and Finance, Elsevier, vol. 52(C).
    7. Zins, Alexandra & Weill, Laurent, 2018. "Do Pan-African banks have the best of both worlds?," Economic Systems, Elsevier, vol. 42(4), pages 665-681.
    8. John Kuada, 2021. "Financial Inclusion and Small Enterprise Growth in Africa: Emerging Perspectives and Research Agenda," Research Africa Network Working Papers 21/084, Research Africa Network (RAN).
    9. Asongu, Simplice A. & Biekpe, Nicholas, 2018. "ICT, information asymmetry and market power in African banking industry," Research in International Business and Finance, Elsevier, vol. 44(C), pages 518-531.
    10. Loaba, Salamata, 2022. "The impact of mobile banking services on saving behavior in West Africa," Global Finance Journal, Elsevier, vol. 53(C).
    11. John Kuada, 2021. "Financial Inclusion and Small Enterprise Growth in Africa: Emerging Perspectives and Research Agenda," Working Papers 21/084, European Xtramile Centre of African Studies (EXCAS).
    12. Simplice Asongu & Rexon Nting & Joseph Nnanna, 2020. "Market power and cost efficiency in the African banking industry," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 47(6), pages 1247-1264, May.
    13. Michael Adusei & Ngozi Adeleye, 2022. "Credit information sharing and non‐performing loans: The moderating role of creditor rights protection," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 27(4), pages 4756-4769, October.

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    More about this item

    Keywords

    Information Asymmetry; Financial Access; Africa;
    All these keywords.

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G29 - Financial Economics - - Financial Institutions and Services - - - Other
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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