Abstract
BackgroundThe purpose of this study is to investigate how an increase in information-sharing bureaus affects financial access.MethodsWe employed contemporary and non-contemporary interactive quantile regressions in 53 African countries for the period 2004–2011. Information-sharing bureaus are proxied with public credit registries and private credit offices. Financial development dynamics involving depth (at overall economic and financial system levels), efficiency (at banking and financial system levels), activity (from banking and financial system perspectives), and size are used.ResultsTwo key findings are established. First, the effect of an increase in private credit bureaus is not clearly noticeable on financial access, probably because private credit agencies are still to be established in many countries. Second, an increase in public credit registries for the most part improves financial allocation efficiency and activity (or credit) between the 25th and 75th quartiles.ConclusionsAs a main policy implication, countries in the top and bottom ends of the financial efficiency and activity distributions are unlikely to benefit from enhanced financial allocation efficiency as a result of an increase in public credit registries.
Highlights
The purpose of this study is to investigate how an increase in information-sharing bureaus affects financial access
The emphasized research gaps are addressed by answering the following question: can we identify the existing levels of financial development in Africa for which increases in information-sharing bureaus show a strong positive effect on financial access? Addressing this research inquiry is important, because the findings should inform policy makers on ways to lift financial access barriers to enable households and small corporations to maximize their savings and earnings for more productivity, more employment, and higher economic growth
The findings show that private credit bureaus are linked to higher financial access, whereas public credit registries have no significant impact on decreasing constraints in financial access
Summary
The purpose of this study is to investigate how an increase in information-sharing bureaus affects financial access. The purpose of this study is to assess how an increase in information-sharing offices affects financial access when existing levels of financial development are taken into account. Recent literature reveals that less than 20% of African households have access to financial services (see IFAD 2011; Asongu et al 2017). This widespread narrative indicates that a great part of the population on the continent depends on the informal sector for financial services. In regions where financial services from the formal sector are available, low-income households and small businesses are for the most part unable to meet certain basic lending requirements, like strict documentation and collateral provision. Even in situations where such conditions are met, cost barriers (like substantial transaction fees) and high minimum deposits of savings could still overwhelmingly restrict financial access
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