EconPapers    
Economics at your fingertips  
 

Financial inclusion and banking sector competition in South Africa

Tendai Gwatidzo and Witness Simbanegavi

No 11061, Working Papers from South African Reserve Bank

Abstract: Using survey data from the World Banks Global Findex Database and a pseudo panel we investigate two pertinent issues pertaining to financial inclusion in South Africa. First, we consider the factors driving the likelihood of accessing financial services in South Africa. Second, we investigate the impact of banking sector competition on financial inclusion in South Africa essentially testing the information and market power hypotheses. Household head characteristics such as age, education and income are found to positively influence the likelihood of being financially included. Considering the relationship between financial inclusion and banking sector competition, evidence supports the information hypothesis rather than the market power hypothesis. That is, lower bank competition facilitates the formation of longer-lasting relationships between banks and their clients, which incentivises banks to invest in information generation and monitoring in previously unserved markets, thereby expanding financial inclusion.

Date: 2024-04-16
New Economics Papers: this item is included in nep-afr, nep-ban, nep-com, nep-dev, nep-fdg, nep-fle, nep-pay and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.resbank.co.za/content/dam/sarb/publica ... -in-south-africa.pdf Revision (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:rbz:wpaper:11061

Access Statistics for this paper

More papers in Working Papers from South African Reserve Bank Contact information at EDIRC.
Bibliographic data for series maintained by Jessica VanWyk ().

 
Page updated 2025-03-31
Handle: RePEc:rbz:wpaper:11061