The Effects of Minimum Bank Capital and Governance on the Financing of the EMCCA Economies

Issidor Noumba (tonfeu_yombi2009@yahoo.com) and André Arnaud Enguene (engueneandre@yahoo.com)
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Issidor Noumba: University of Yaounde II
André Arnaud Enguene: University of Yaounde II

Chapter Chapter 7 in Monetary and Financial Systems in Africa, 2022, pp 143-168 from Springer

Abstract: Abstract The chapter analyzes the effect of minimum bank capital on the financing of the CEMAC economies over 1998–2016, using data from BEAC and COBAC. Commercial banks operating in that zone are reluctant to finance local small and medium enterprises (SMEs). In December 2019, SMEs received 14.6% of total loans, while big companies obtained 78%. So, their analysis is on the effect of the minimum bank capital on the real cost of credit, the credit term structure, and the various economic agents. Their findings, among other things, show that: (i) the minimum bank capital is positively and significantly linked to the total credits to the economy; (ii) the minimum bank capital is negatively associated with the short-run loans. The study suggests that regulatory authorities find ways of encouraging banks to increase the level of business financing sharply.

Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-030-96225-8_7

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DOI: 10.1007/978-3-030-96225-8_7

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