Analysis of the Determinants of Bank Lending to Businesses - The Case of Commercial Banks in the WAEMU

Ngadiary Diouf and Mohamed Lamine Mbengue ()
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Mohamed Lamine Mbengue: Gaston Berger University, Senegal

Review of Development Finance Journal, 2025, vol. 15, issue 1, 54-68

Abstract: We study how banking characteristics and their interaction with external shocks affect credit supply in West African Economic and Monetary Union (WAEMU) countries. A static and dynamic panel model is used on 66 banks between 2005 and 2021. The results show that capital, credit risk and securities portfolio inhibit lending activity, while liquidity favors its expansion. In addition, larger, more liquid and profitable deposit-taking banks are less affected by external shocks, while less capitalized banks are more sensitive. We recommend prudent management to ensure the sector's stability and resilience.

Keywords: Lending behavior; Monetary policy; Panel model; WAEMU (search for similar items in EconPapers)
JEL-codes: E51 G21 G29 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:afj:journ3:v:15:y:2025:i:1:p:54-68

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