Financial Development in Sub-Saharan Africa: Promoting Inclusive and Sustainable Growth
Departmental Papers, September 14, 2016
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- Financial Development in Sub-Saharan Africa: Promoting Inclusive and Sustainable Growth
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Bibliographic details
- Authors: Montfort Mlachila, Ahmat Jidoud, Monique Newiak, Bozena Radzewicz-Bak, Misa Takebe
- Published: September 14, 2016
- Series: Departmental Papers
- DOI: https://doi.org/10.5089/9781475532401.087
Summary and key findings
- Sub-Saharan African countries have made substantial progress in financial development over the past decade, but there is still considerable scope for further development, especially compared with other regions.
- Until a decade or so ago, the level of financial development in a large number of sub-Saharan African countries had regressed relative to the early 1980s.
- With the exception of the region’s middle-income countries, both financial market depth and institutional development are lower than in other developing regions.
- The region has led the world in innovative financial services based on mobile telephony, but there remains scope to increase financial inclusion further.
- The development of mobile telephone-based systems has helped to incorporate a large share of the population into the financial system, especially in East Africa.
- Pan-African banks have been a driver for homegrown financial development, but they also bring a number of challenges.
Analysis themes
- Comparative development:
- Progress over the past decade contrasts with earlier regressions relative to the early 1980s in many countries.
- Middle-income countries in the region show higher levels of financial market depth and institutional development relative to lower-income peers.
- Financial inclusion and technology:
- Mobile telephony–based financial services are a regional innovation leader and have materially expanded access to financial services.
- East Africa is highlighted as a region where mobile-based systems have incorporated a large share of the population into the financial system.
- Structural drivers and risks:
- Pan-African banks act as important domestic drivers of financial development while presenting associated challenges (not specified in the supplied content).
Subjects and keywords (as listed)
- Subjects: Basel II, Economic sectors, Financial inclusion, Financial markets, Financial regulation and supervision, Financial sector, Financial sector development, Financial services, Mobile banking
- Keywords: Africa, Asia and Pacific, banking sector, Basel II, commodity price, DP, DPPP, East Africa, Financial inclusion, financial institution index, Financial sector, Financial sector development, financial system, Global, market index, monetary union, return on assets, return on equity, Sub-Saharan Africa
Policy recommendations and gaps in supplied content
- The supplied content summarizes progress, comparative gaps, technological innovation, and the role of pan-African banks.
- No explicit policy recommendations are provided in the supplied content.
Financial Development in Sub-Saharan Africa: Promoting Inclusive and Sustainable Growth, Departmental Paper No. 2016/011 (September 14, 2016).