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Determinants of Bank Interest Margins in Sub-Saharan Africa, Calixte Ahokpossi

Abstract
Financial intermediation is low in sub-Saharan Africa (SSA) compared to other regions of the world. This paper examines the determinants of bank interest margins using a sample of 456 banks in 41 SSA countries. The results show that market concentration is positively associated with interest margins, but the impact depends on the level of efficiency of each bank. In particular, compared to inefficient banks, efficient ones increase their margins more in concentrated markets. This indicates that policies that promote competition and reduce market concentration would help lower interest margins in SSA. The results also show that bank-specific factors such as credit risk, liquidity risk, and bank equity are important determinants of interest margins. Finally, interest margins are sensitive to inflation, but not to economic growth or public or foreign ownership. There are regional differences within SSA regarding the level of interest margins even after controlling for other factors
Table Of Contents
Cover; Contents; I. Introduction; Figures; 1. Net Interest Margins: International Comparisons; 2. Market Concentration and Size of the Banking Sector; II. Literature Review; III. Data and Methodology; IV. Results; V. Conclusions; References; Tables; 1. Variables Definitions; 2. Summary Statistics; 3. Net Interest Margins: Country Classifications; 4. Net Interest Margins by Region; 5. Mean Difference Test; 6. Net Interest Margins: Bank Characteristics and Macroeconomic Variables; 7. Robustness Checks
Language
eng
Literary Form
non fiction
Note
"African Department"--p. 2 of pdf
Physical Description
1 online resource (22 p.)
Specific Material Designation
remote
Form Of Item
online
Isbn
9781299265080

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