Reducing Information Asymmetry with ICT: A Critical Review of Loan Price and Quantity Effects in Africa

International Journal of Managerial Finance, 15(2), pp.130-163 (2019)

29 Pages Posted: 9 Jul 2016 Last revised: 26 Mar 2019

See all articles by Simplice Asongu

Simplice Asongu

African Governance and Development Institute

Sara le Roux

Oxford Brookes University - Department of Economics

Date Written: July 8, 2016

Abstract

This study investigates loan price and quantity effects of information sharing offices with ICT, in a panel of 162 banks consisting of 42 African countries for the period 2001-2011.The empirical evidence is based on Generalised Method of Moments and Instrumental Quantile Regressions. Our findings broadly show that ICT with public credit registries decrease the price of loans and increase the quantity of loans. While the net effects from the interaction of ICT with private credit bureaus do not lead to enhanced financial access, corresponding marginal effects show that ICT can complement private credit bureaus to increase loan quantity and decrease loan prices when certain thresholds of ICT are attained. We compute and discuss the ICT thresholds that are required to make this possible.

Keywords: Financial access; Information asymmetry; ICT

JEL Classification: G20; G29; L96; O40; O55

Suggested Citation

Asongu, Simplice and le Roux, Sara, Reducing Information Asymmetry with ICT: A Critical Review of Loan Price and Quantity Effects in Africa (July 8, 2016). International Journal of Managerial Finance, 15(2), pp.130-163 (2019). Available at SSRN: https://ssrn.com/abstract=2807117 or http://dx.doi.org/10.2139/ssrn.2807117

Simplice Asongu (Contact Author)

African Governance and Development Institute ( email )

P.O. Box 8413
Yaoundé, 8413
Cameroon

Sara Le Roux

Oxford Brookes University - Department of Economics ( email )

Oxford Brookes Business School
Headington Campus
Oxford, OX3 0BP
United Kingdom

HOME PAGE: http://saraleroux.weebly.com/

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