Differences in African banking systems: causes and consequences

Mutarindwa, Samuel; Schäfer, Dorothea; Stephan, Andreas

doi:10.1017/s174413742100014x

Cited by 5 publications

(1 citation statement)

References 75 publications

(127 reference statements)

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“…This finding can be attributed to the underdeveloped state of the African banking sector. The depth and accessibility of the financial systems in Africa are at a lower stage of development (Mutarindwa et al, 2021). As a result, the sector may be unable to achieve the appropriate degree of profitability.…”

Section: Regression Resultsmentioning

confidence: 99%

Quantifying the Link between Financial Development and Bank Profitability

Bashiru¹,

Bunyaminu²,

Yakubu³

et al. 2023

TEL

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This study seeks to examine the impact of financial development on bank profitability in Sub-Saharan Africa (SSA). We also investigate how institutional quality, bank stability, financial openness, and competition affect profitability. The researchers employ data from 33 countries covering from 2000 to 2017. Using the generalized method of moments (GMM) technique, the findings show that financial development exerts a negative significant effect on banking sector profitability. This result holds regardless of the indicator of profitability. This indicates that financial development dampens profitability in SSA. The study also reveals that institutional quality and bank stability positively and significantly influence profitability. We further observe that the impact of financial openness and competition on profitability significantly differs depending on the measure of profitability. The study discusses key implications for policy.

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Section: Regression Resultsmentioning

confidence: 99%

Quantifying the Link between Financial Development and Bank Profitability

Bashiru¹,

Bunyaminu²,

Yakubu³

et al. 2023

TEL

View full text Add to dashboard Cite

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Certification against greenwashing in nascent bond markets: lessons from African ESG bonds

Mutarindwa,

Schäfer,

Stephan

2024

Eurasian Econ Rev

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Africa is one of the most vulnerable continents to climate change. Climate and sustainability-linked bonds can provide funding to African governments and corporations for projects that help to mitigate climate change, combat biodiversity loss, and foster sustainable development. However, less than 0.3% of the global environmental, social, governance (ESG) bond issuance volume is devoted to projects in Africa. Based on the entire universe of 107 African ESG bonds from 42 governmental and corporate issuers over the period 2010–2023, this paper establishes that ESG bonds provide benefits to both issuers and investors in terms of lower spreads and volatility. Our econometric results highlight that greenwashing is a valid concern for investors in African ESG bonds and certification of ESG bonds makes a difference vis-à-vis the self-labeling of green bonds. Non-certified ESG bonds do not offer similar benefits compared to certified ones. Green macro-financial policy and suitable regulation to prevent greenwashing can foster African ESG-bond markets.

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