The Effect of Reducing Information Asymmetry on Loan Price and Quantity in the African Banking Industry

Asongu, Simplice (2017): The Effect of Reducing Information Asymmetry on Loan Price and Quantity in the African Banking Industry. Published in: Research in International Business and Finance , Vol. 41, No. October (October 2017): pp. 185-197.

Abstract

The purpose of this study is to assess how information sharing offices affect loan price and quantity in the African banking industry. The empirical evidence is based on a panel of 162 banks in 42 countries for the period 2001-2011. From the Generalised Method of Moments, public credit registries decrease loan price. With instrumental Quantile Regressions, two main findings are established. Public credit registries consistently decrease the price of loans whereas private credit bureaus consistently have the opposite effect. Public credit registries increase loan quantity in bottom quintiles (or banks associated with lower loan quantities) while private credit bureaus increase loan quantity in top quintiles (or banks associated with higher loan quantities).

• Item Type: MPRA Paper
• Language: English
• Keywords: Information Asymmetry; Financial Access; Africa
• Subjects: G - Financial Economics > G2 - Financial Institutions and Services > G20 - General; G - Financial Economics > G2 - Financial Institutions and Services > G29 - Other; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O16 - Financial Markets ; Saving and Capital Investment ; Corporate Finance and Governance; O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies > O55 - Africa

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