With extensive country- and firm-level data sets we first document that the financial sectors of most sub-Saharan African countries remain significantly underdeveloped by the standards of other developing countries. We also find that popul ation 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 deve loping viable banking sectors outside large metropolitan areas, we focus on Kenya, which has made significant strides in financial inclusion and development in recent years. We find a positive and significant impact of Equity Bank, a leading private commercial bank on financial access, especially for under-privileged 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.

Resolving the African financial development gap: cross-country comparisons and a within-country study of Keynia

Carletti, Elena;
2016

Abstract

With extensive country- and firm-level data sets we first document that the financial sectors of most sub-Saharan African countries remain significantly underdeveloped by the standards of other developing countries. We also find that popul ation 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 deve loping viable banking sectors outside large metropolitan areas, we focus on Kenya, which has made significant strides in financial inclusion and development in recent years. We find a positive and significant impact of Equity Bank, a leading private commercial bank on financial access, especially for under-privileged 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.
2016
9780226315720
Edwards, Sebastian; Johnson, Simon; Weil, David N.
African successes. Vol III Modernization and development
Allen, Franklin; Carletti, Elena; Cull, Robert; Qian, Jun; Senbet, Lemma; Valenzuela, Patricio
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11565/3989898
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