Bank Efficiency and Competition in Low-Income Countries: The Case of Uganda

Author/Editor:

David Hauner ; Shanaka J Peiris

Publication Date:

December 1, 2005

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

There is a concern that the state-dominated, inefficient, and fragile banking systems in many low-income countries, especially in sub-Saharan Africa, are a major hindrance to economic growth. This paper systematically analyzes the impact of the far-reaching banking sector reforms undertaken in Uganda to improve competition and efficiency. Using models that have been previously used only in industrial countries, we find that the level of competition has increased significantly and has been associated with a rise in efficiency. Moreover, on average, larger banks and foreign-owned banks have become more efficient, while smaller banks have become less efficient in the face of increased competitive pressures.

Series:

Working Paper No. 2005/240

Subject:

Banking Commercial banks Competition Loans Treasury bills and bonds

English

Publication Date:

December 1, 2005

ISBN/ISSN:

9781451862591/1018-5941

Stock No:

WPIEA2005240

Pages:

31

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