Resolving the African Financial Development Gap

Resolving the African Financial Development Gap
Author: Franklin Allen
Publisher:
Total Pages: 62
Release: 2017
Genre:
ISBN:

With extensive country and firm-level data sets, this paper first documents that the financial sectors of most Sub-Saharan African countries remain significantly underdeveloped by the standards of other developing countries. The paper also finds that population density appears to be considerably more important for banking sector development in Africa than elsewhere. To better understand how countries can overcome the high costs of developing viable banking sectors outside large metropolitan areas, the analysis focuses on Kenya, which has made significant strides in financial inclusion and development in recent years. The paper finds a positive and significant impact of Equity Bank, a leading private commercial bank, on financial access, especially for underprivileged households. Equity Bank's business model -- providing financial services to population segments typically ignored by traditional commercial banks and generating sustainable profits in the process -- can be a potential solution to the financial access problem that has hindered the development of inclusive financial sectors in many other African countries.

The African Financial Development and Financial Inclusion Gaps

The African Financial Development and Financial Inclusion Gaps
Author: Franklin Allen
Publisher:
Total Pages: 37
Release: 2017
Genre:
ISBN:

This paper investigates the African financial development and financial inclusion gaps relative to other peer developing countries. The paper uses a set of variables related to financial development and inclusion. It first estimates the gaps between African countries and other developing countries with similar degrees of economic development. Then, it explores the determinants of financial development and inclusion. The analysis finds that population density is considerably more important for financial development and inclusion in Africa than elsewhere. Finally, the paper shows evidence that a recent innovation in financial services, mobile banking, has helped to overcome infrastructural problems and improve financial access.

The African Financial Development and Financial Inclusion Gaps

The African Financial Development and Financial Inclusion Gaps
Author:
Publisher:
Total Pages: 37
Release: 2014
Genre: Economic development
ISBN:

This paper investigates the African financial development and financial inclusion gaps relative to other peer developing countries. The paper uses a set of variables related to financial development and inclusion. It first estimates the gaps between African countries and other developing countries with similar degrees of economic development. Then, it explores the determinants of financial development and inclusion. The analysis finds that population density is considerably more important for financial development and inclusion in Africa than elsewhere. Finally, the paper shows evidence that a recent innovation in financial services, mobile banking, has helped to overcome infrastructural problems and improve financial access.

Financing Africa

Financing Africa
Author: Samuel Munzele Maimbo
Publisher: World Bank Publications
Total Pages: 325
Release: 2011-09-07
Genre: Business & Economics
ISBN: 0821387979

Financing Africa takes stock of Africa's financial systems in light of recent changes in the global financial system --including the greater risk aversion of international investors, a shift in economic and financial powers towards emerging markets and the regulatory reform debate - and the increasing role of technology. Using a wider and more detailed array of data than previous publications, we observe a trend towards financial deepening, more stability and more inclusion leading up to the crisis; serious challenges, however, continue, including limited access to financial services, focus on short-term contracts and hidden fragility, related to weak regulatory frameworks, undue government interference and governance deficiencies. Our policy analysis therefore focuses on (i) expanding outreach, (ii) fostering long-term finance and (iii) improving regulation and supervision. We identify the positive role of innovation and competition, a stronger focus on non-traditional financial service providers, and more emphasis on demand-side constraints as priority areas for policy actions. Specifically, competition from new players outside the banking system, including telecomm companies can increase outreach with technological innovation that changes the economics of retail finance. Moving beyond national stock exchanges that are not sustainable in most African countries towards regional solutions and over-the-counter trades can help foster long-term finance, as can addressing governance challenges in contractual savings institutions, including life insurance companies and pension funds. Finally, there is a need to look beyond supply-side constraints towards users of financial services, focusing more on financial literacy of households and firms, but also consumer protection. In formulating policy messages, we carefully distinguish between different country groupings, differentiating -- among others -- between low- and middle-income and small and larger economies, with a special focus on resource-based economies and post-conflict countries. This book reaches out to both policy makers concerned about a more inclusive and effective financial system and other stakeholders, including practitioners and development partners. With this book we aim to contribute to the on-going financial sector debate on Africa, with the ultimate goal of faster economic development and poverty reduction.

The Impact of Financial Sector Development on Economic Growth

The Impact of Financial Sector Development on Economic Growth
Author: Piabuo Mandiefe
Publisher:
Total Pages: 28
Release: 2015
Genre:
ISBN:

African countries are developing better economic and monetary reforms so as to gain the status of an emergent country over a certain period of time, Cameroon is not left behind, she wants to be emergent by 2035. This study seeks to verify the short-run and long-run impact of financial sector development on economic growth and also to verify the gap of financial development that separates Cameroon and an emergent country like South Africa. The vector error correction model was used, in Cameroon a long-run relationship between economic growth and financial development was noticed while for South Africa there is a short-run relationship between bank deposits and economic growth, there is also a long-run relationship between economic growth and financial development. The South African economy moves towards its long-run equilibrium faster after economic shocks thanks to its good financial developed economy. We also notice that there is a gap of 0.26, this means that for the economy of Cameroon to be emergent, the speed of long-run adjustment should increase by 0.26.

FinTech in Sub-Saharan African Countries

FinTech in Sub-Saharan African Countries
Author: Mr.Amadou N Sy
Publisher: International Monetary Fund
Total Pages: 61
Release: 2019-02-14
Genre: Business & Economics
ISBN: 1484385667

FinTech is a major force shaping the structure of the financial industry in sub-Saharan Africa. New technologies are being developed and implemented in sub-Saharan Africa with the potential to change the competitive landscape in the financial industry. While it raises concerns on the emergence of vulnerabilities, FinTech challenges traditional structures and creates efficiency gains by opening up the financial services value chain. Today, FinTech is emerging as a technological enabler in the region, improving financial inclusion and serving as a catalyst for the emergence of innovations in other sectors, such as agriculture and infrastructure.

Africa's Infrastructure

Africa's Infrastructure
Author: World Bank
Publisher: World Bank Publications
Total Pages: 386
Release: 2009-12-01
Genre: Business & Economics
ISBN: 0821380834

Sustainable infrastructure development is vital for Africa s prosperity. And now is the time to begin the transformation. This volume is the culmination of an unprecedented effort to document, analyze, and interpret the full extent of the challenge in developing Sub-Saharan Africa s infrastructure sectors. As a result, it represents the most comprehensive reference currently available on infrastructure in the region. The book covers the five main economic infrastructure sectors information and communication technology, irrigation, power, transport, and water and sanitation. 'Africa s Infrastructure: A Time for Transformation' reflects the collaboration of a wide array of African regional institutions and development partners under the auspices of the Infrastructure Consortium for Africa. It presents the findings of the Africa Infrastructure Country Diagnostic (AICD), a project launched following a commitment in 2005 by the international community (after the G8 summit at Gleneagles, Scotland) to scale up financial support for infrastructure development in Africa. The lack of reliable information in this area made it difficult to evaluate the success of past interventions, prioritize current allocations, and provide benchmarks for measuring future progress, hence the need for the AICD. Africa s infrastructure sectors lag well behind those of the rest of the world, and the gap is widening. Some of the main policy-relevant findings highlighted in the book include the following: infrastructure in the region is exceptionally expensive, with tariffs being many times higher than those found elsewhere. Inadequate and expensive infrastructure is retarding growth by 2 percentage points each year. Solving the problem will cost over US$90 billion per year, which is more than twice what is being spent in Africa today. However, money alone is not the answer. Prudent policies, wise management, and sound maintenance can improve efficiency, thereby stretching the infrastructure dollar. There is the potential to recover an additional US$17 billion a year from within the existing infrastructure resource envelope simply by improving efficiency. For example, improved revenue collection and utility management could generate US$3.3 billion per year. Regional power trade could reduce annual costs by US$2 billion. And deregulating the trucking industry could reduce freight costs by one-half. So, raising more funds without also tackling inefficiencies would be like pouring water into a leaking bucket. Finally, the power sector and fragile states represent particular challenges. Even if every efficiency in every infrastructure sector could be captured, a substantial funding gap of $31 billion a year would remain. Nevertheless, the African people and economies cannot wait any longer. Now is the time to begin the transformation to sustainable development.

The Global Findex Database 2017

The Global Findex Database 2017
Author: Asli Demirguc-Kunt
Publisher: World Bank Publications
Total Pages: 228
Release: 2018-04-19
Genre: Business & Economics
ISBN: 1464812683

In 2011 the World Bank—with funding from the Bill and Melinda Gates Foundation—launched the Global Findex database, the world's most comprehensive data set on how adults save, borrow, make payments, and manage risk. Drawing on survey data collected in collaboration with Gallup, Inc., the Global Findex database covers more than 140 economies around the world. The initial survey round was followed by a second one in 2014 and by a third in 2017. Compiled using nationally representative surveys of more than 150,000 adults age 15 and above in over 140 economies, The Global Findex Database 2017: Measuring Financial Inclusion and the Fintech Revolution includes updated indicators on access to and use of formal and informal financial services. It has additional data on the use of financial technology (or fintech), including the use of mobile phones and the Internet to conduct financial transactions. The data reveal opportunities to expand access to financial services among people who do not have an account—the unbanked—as well as to promote greater use of digital financial services among those who do have an account. The Global Findex database has become a mainstay of global efforts to promote financial inclusion. In addition to being widely cited by scholars and development practitioners, Global Findex data are used to track progress toward the World Bank goal of Universal Financial Access by 2020 and the United Nations Sustainable Development Goals. The database, the full text of the report, and the underlying country-level data for all figures—along with the questionnaire, the survey methodology, and other relevant materials—are available at www.worldbank.org/globalfindex.