The Influence of Loan Portfolio Quality on Sound Banking in CEMAC: The Importance of Bank¡¯s Internal and External Environment

Kadandji Andre and Votsoma Djekna ()

International Journal of Economics and Finance, 2018, vol. 10, issue 7, 136

Abstract: In this article we analyze the relationship between the loan portfolio quality and the soundness of the banking system in the Central African Economic and Monetary Community. The data used concern a panel of 41 banks in 4 countries in the Community for the period 2000 to 2013. For the analysis of the influence of different indicators, we use a model in nested equations. This study shows that taking into account both individual and macroeconomic indicators makes it possible to neutralize the effects of the deterioration of the quality of the credit portfolio on bank soundness. These indicators together improve the contribution of intermediation activity to the strength of banks.

Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:ibn:ijefaa:v:10:y:2018:i:7:p:136

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