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

Plamen Iossifov and May Y. Khamis
Authors registered in the RePEc Author Service: Пламен Йосифов ()

No 09/180, IMF Working Papers from International Monetary Fund

Abstract: 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.

Keywords: Bank credit; Bank supervision; Banking sector; Credit demand; Credit expansion; Credit risk; Cross country analysis; Economic models; Financial crisis; Fiscal policy; Household credit; Private sector; Sub-Saharan Africa; Time series (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-afr, nep-ban and nep-dev
Date: 2009-08-25

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