Determinants of Commercial Banks’ Credit in the Democratic Republic of Congo.

Abstract

The bank’s loans to the economy in the Democratic Republic of Congo are among the lowest in the Sub-Saharan African countries. The present study investigates the specific reasons that explain that low level. The factors which explain the banks’ credit to the economy under investigation are the rate, the banking inclusion, the banks’ branches, and savings and deposits. To conduct this research, a quantitative approach is used to analyze secondary data collected from annual reports of the Central Bank of Congo and IMF from 2010 to 2019. To explain the credit to the economy, Eviews 9 software estimates the econometric model of factors rate, banking inclusion, banking branches, deposits and savings. As a result, the level of credit to the economy is significantly explained by the credit rate and savings. Credit lent by banks to the economy in the Democratic Republic of Congo is low because the credit rate is high, and banks do not gather enough savings and deposits. The Banks and the Government should adopt new strategies to increase savings in commercial banks.