Bank Efficiency in Sub-Saharan African Middle Income Countries
IMF Working Papers, January 1, 2009
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Bibliographic details
- Authors: Chuling Chen
- Published: January 1, 2009
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451871616.001
Summary and key findings
- Study uses bank level data to analyze efficiency of banks in Sub-Saharan African middle-income countries.
- Banks, on average, could save 20-30 percent of their total costs if they were operating efficiently.
- Foreign banks are more efficient than public banks and domestic private banks.
- Findings emphasize the importance of stronger institutions, greater competition, and improved governance.
Factors associated with efficiency levels
- Macroeconomic stability.
- Depth of financial development.
- Degree of market competition.
- Strong legal rights and contract laws.
- Better governance, including political stability and government effectiveness.
Policy implications and recommendations
- Build stronger institutions to support banking sector efficiency.
- Promote more competition in the banking sector.
- Improve governance measures (political stability, government effectiveness).
- Strengthen legal rights and contract enforcement to support efficient banking operations.
- Deepen financial development to enhance efficiency gains.
Subjects and keywords (as listed)
- Subjects: Bank deposits, Banking, Commercial banks, Competition, Financial institutions, Financial markets, Financial services, Foreign banks, Legal support in revenue administration, Revenue administration
- Keywords: Africa, bank, Bank deposits, banking sector, Commercial banks, competition, cost efficiency, efficiency analysis, efficiency frontier, efficiency level, efficiency score, Foreign banks, input price, Legal support in revenue administration, market structure, minimization problem, stochastic frontier analysis, Sub-Saharan Africa, WP
Chuling Chen, January 1, 2009 — IMF Working Paper No. 2009/014; Pages: 34; DOI: https://doi.org/10.5089/9781451871616.001; ISBN: 9781451871616