Pan-African Banks on the Rise: Does Cross-Border Banking Increase Firms' Access to Finance in WAEMU?

Time: 24 October 2018, 13:00-15:00
Venue: S314, SOAS University of London
Speaker: Dr Désiré Kanga

Abstract

We study how cross-border banking, ignited by the rise of Pan-African banks, affects the level of bank competition in the West African Economic and Monetary Union (WAEMU), particularly the ultimate impact on bank lending behaviour and firms' access to finance. We use hand-collected bank level data from all WAEMU countries for 2000-2015 and the World Bank Enterprise Surveys data, 2005-2016. Our results suggest that cross border banking increases competition in the banking sector of WAEMU countries, which pushes banks to look for alternative sources of revenues beyond traditional lending. Also, we find that cross-border banking is associated with improvements in firms' access to bank finance. Our findings are robust to alternative empirical specifications and use of competing measures of key variables.

Co-author: Victor Murinde, Lemma Senbet, Issouf Soumaré