The African Financial Development Gap

58 Pages Posted: 22 Mar 2009 Last revised: 29 Sep 2010

See all articles by Franklin Allen

Franklin Allen

Imperial College London

Elena Carletti

Bocconi University - Department of Finance; European University Institute - Robert Schuman Centre for Advanced Studies (RSCAS)

Robert Cull

World Bank - Development Research Group (DECRG)

Jun "QJ" Qian

Fanhai International School of Finance, Fudan University

Lemma W. Senbet

University of Maryland - Robert H. Smith School of Business

Date Written: September 28, 2010

Abstract

Economic growth in Africa has long been disappointing. We document that the financial sectors of most sub-Saharan African countries remain significantly underdeveloped by the standards of other developing countries. We examine the factors that are associated with financial development in Africa and compare them with those in other developing countries. Population density appears to be considerably more important for banking sector development in Africa than elsewhere. Given the high costs of building roads and developing a viable banking sector, technology advances such as mobile banking could be a promising way to facilitate African financial development. Similar to other developing countries, natural resources endowment are associated with lower level of financial development in Africa, but macro policies do not appear to be an important determinant.

Keywords: Africa, finance and growth, banks, institutions, population density

JEL Classification: O5, K0, G0

Suggested Citation

Allen, Franklin and Carletti, Elena and Cull, Robert and Qian, Jun and Senbet, Lemma W., The African Financial Development Gap (September 28, 2010). Available at SSRN: https://ssrn.com/abstract=1362216 or http://dx.doi.org/10.2139/ssrn.1362216

Franklin Allen

Imperial College London ( email )

South Kensington Campus
Exhibition Road
London, Greater London SW7 2AZ
United Kingdom

Elena Carletti

Bocconi University - Department of Finance ( email )

Via Roentgen 1
Milano, MI 20136
Italy

European University Institute - Robert Schuman Centre for Advanced Studies (RSCAS) ( email )

Villa La Fonte, via delle Fontanelle 18
50016 San Domenico di Fiesole
Florence, Florence 50014
Italy

Robert Cull

World Bank - Development Research Group (DECRG) ( email )

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States
202-473-6365 (Phone)
202-522-1155 (Fax)

HOME PAGE: http://econ.worldbank.org/staff/rcull

Jun Qian (Contact Author)

Fanhai International School of Finance, Fudan University ( email )

Shanghai
China
86-21-63895501 (Phone)
86-21-62934572 (Fax)

HOME PAGE: http://www.fisf.fudan.edu.cn/show-65-69.html

Lemma W. Senbet

University of Maryland - Robert H. Smith School of Business ( email )

College Park, MD 20742-1815
United States
301-405-2242 (Phone)
301-405-0359 (Fax)

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
177
Abstract Views
930
Rank
170,703
PlumX Metrics