Financial Deepening, Property Rights, and Poverty: Evidence from Sub-Saharan Africa

Raju Singh and Yifei Huang ()
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Yifei Huang: GMO, United States

Journal of Banking and Financial Economics, 2015, vol. 1, issue 3, 130-151

Abstract: Recent studies on the relationship between financial development and poverty have been inconclusive. Some claim that, by allowing more entrepreneurs to obtain financing, financial development improves the allocation of capital, which has a particularly large impact on the poor. Others argue that it is primarily the rich and politically connected who benefit from improvements in the financial system. This paper looks at a sample of 37 countries in sub-Saharan Africa from 1992 through 2006. Its results suggest that financial deepening could widen income inequality and increase poverty, if not accompanied by stronger property rights. Similarly, interest rate and lending liberalization alone could be detrimental to the poor without institutional reforms, in particular stronger property rights and wider access to credit information.

Keywords: financial development; poverty alleviation; income distribution; Africa (search for similar items in EconPapers)
JEL-codes: G00 O11 O16 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (16)

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Working Paper: Financial Deepening, Property Rights and Poverty: Evidence From Sub-Saharan Africa (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:sgm:jbfeuw:v:1:y:2015:i:3:p:130-151

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