Resolving the African Financial Development Gap : Cross-Country Comparisons and a Within-Country Study of Kenya
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 th...
| Main Authors: | , , , , , |
|---|---|
| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2013
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2013/01/18207012/resolving-african-financial-development-gap-cross-country-comparisons-within-country-study-kenya http://hdl.handle.net/10986/16043 |
| Summary: | 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. |
|---|