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Publication Information
Published by: Admin
Published: 23 hours ago
View: 16
Pages: 33
ISBN: 1
Download PDF (EN)
Abstract
Discouraged borrowers are a strange phenomenon that requires particular
attention. This paper examines whether banking stability influences the
discouragement of firms on the credit market
in some African countries. The study selected a sample of firms from 22 African
countries based on information contained in the World Bank Enterprise Survey
(WBES) database. We find that stability in the banking system reduces the discouragement of firms on the
credit market in Africa. In other words, in countries with a stable banking
system, firms are less likely to be discouraged from loan application. The
findings are robust to the various tests. These results call on the political
authorities to strengthen the regulatory framework for banking activity. This
mainly involves prudential rules designed to clean up and reduce the risk of
crises occurring. In addition, it is important to put in place measures to
monitor possible links between major global banks and certain banking groups
operating in Africa, in order to mitigate the risk of a banking or financial
crisis spreading from one region to Africa.
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