Institutional Analysis of Financial Market Fragmentation in Sub-Saharan Africa: A Risk-Cost Configuration Approach

Machiko Nissanke and Ernest Aryeetey

No RP2006-87, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)

Abstract: The paper examines the source of financial market fragmentation in sub-Saharan Africa in the framework of institutional economics. Based on fieldwork data from Ghana, Malawi, Nigeria, and Tanzania, it analyses financial risk management, the transaction costs for loan screening and monitoring, and contract enforcement. It shows how, faced with various institutional constraints, the range of clientele selected by formal and informal lenders becomes both narrow and at the extreme market-ends.

Keywords: Capital market; Financial institutions; Institutional economics; Risk; Transaction costs (search for similar items in EconPapers)
Date: 2006
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Citations: View citations in EconPapers (4)

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