Credit Growth in Sub-Saharan Africa—Sources, Risks, and Policy Responses

August 1, 2009

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May Y Khamis, and Plamen K Iossifov. Credit Growth in Sub-Saharan Africa—Sources, Risks, and Policy Responses, (USA: International Monetary Fund, 2009) accessed November 21, 2024

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

In this paper, we analyze credit growth in Sub-Saharan Africa over the past decade focusing on the post-2002 rapid credit growth in select countries. We develop regression models of the fundamental determinants of bank credit and use them to examine whether they can fully explain developments in rapid credit growth countries. We then argue that rapid credit expansion, whether a manifestation of a credit boom or driven by fundamentals, can give rise to prudential and macroeconomic risks. We detail these risks and discuss the choice of policies to mitigate them. We conclude by evaluating the likely impact of the ongoing global recession and financial crisis on credit growth in Sub-Saharan Africa.

Subject: Bank credit, Banking, Credit, Credit booms, Foreign banks

Keywords: Private sector, SSA country, Sub-Saharan Africa, WP

Publication Details

Pages:

29
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2009/180
Stock No:

WPIEA2009180
ISBN:

9781451873276
ISSN:

1018-5941

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