Are financial cooperatives crowded out by commercial banks in the process of financial sector development?

Anaïs Périlleux (), Annabel Vanroose and Bert D'Espallier

No 16-002, Working Papers CEB from ULB -- Universite Libre de Bruxelles

Abstract: This paper investigates whether financial cooperatives are crowded out by commercial banks in the process of financial sector development. We use a self-constructed database (1990-2011) of financial cooperatives in 55 developing countries. Our empirical results are threefold. First, financial cooperatives tend to reach more members in countries where the commercial banking sector is weak. This validates their role as a market failure solution. Second, in the process of commercial bank expansion, financial cooperatives run the risk of being crowded out. Third, financial cooperatives seem to benefit from some kind of bank presence, especially as far as savings mobilization is concerned.

Keywords: Financial cooperatives; Microfinance; Competition; Crowding out; Financial Sector Development (search for similar items in EconPapers)
JEL-codes: G21 L31 O16 P13 (search for similar items in EconPapers)
Pages: 41 p.
Date: 2016-01-07
New Economics Papers: this item is included in nep-ban, nep-cfn and nep-mfd
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Citations: View citations in EconPapers (12)

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Related works:
Journal Article: Are Financial Cooperatives Crowded out by Commercial Banks in the Process of Financial Sector Development? (2016)
Working Paper: Are financial cooperatives crowded out by commercial banks in the process of financial sector development? (2016)
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