Munich Personal RePEc Archive

ICT and Bank Performance in Sub-Saharan Africa: A Dynamic Panel Analysis

Agu, Chinonso .V. and Aguegboh, Ekene .S. (2020): ICT and Bank Performance in Sub-Saharan Africa: A Dynamic Panel Analysis.

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Abstract

This paper aims at investigating the impact of information and communication technology (ICT) on bank performance in Sub-Saharan African (SSA) banking industry. The data set entails panel data for 35 Sub-Saharan African countries and we employ the system generalized method of moment (GMM) estimation technique for dynamic panel models. ICT variables understudied include: number of automated teller machines (ATMs), ATMs per 100,000 adults, ATM per 1,000 km2 and mobile money transaction; while bank performance was proxied using returns on assets (ROA), returns on earning (ROE), and net interest margin (NIM). The result reveals that ICT is negatively associated with bank performance except for ATMs per 100,000 adults and ATM per 1,000km2, which had positive impact on ROE and NIM. The findings suggest that ICT largely affects bank performance in the short run; in long run these investments become very beneficial to improving bank performance.

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