Credit Information Sharing and Bank Loan Pricing: Do Concentration and Governance Matter?

Fosu, S., Danso, A., Agyei-Boapeah, H., & Ntim, C.G. (2020). Credit information sharing and bank loan pricing: Do concentration and governance matter?, International Journal of Finance and Economics, Forthcoming.

48 Pages Posted: 14 Jul 2020

See all articles by Samuel Fosu

Samuel Fosu

De Montfort University; University of Birmingham - Birmingham Business School

Albert Danso

Leicester Castle Business School

Henry Agyei-Boapeah

University of York - The York Management School

Collins G. Ntim

University of Southampton Business School, UK; University of Southampton

Date Written: June 21, 2020

Abstract

The development of credit information sharing schemes in developing countries has gained significant attention in recent times along with ongoing financial sector reforms. In this paper, we provide first-hand evidence of the effect of credit information sharing on credit intermediation cost in these countries, and consequently ascertain the extent to which the credit information sharing–credit intermediation cost nexus may be accentuated by banking market concentration and governance quality. Using a large dataset covering 272 banks from 27 African countries over the 2004-2012 period, we uncover four new findings. First, we find that credit information sharing does reduce credit intermediation cost. Second, we show that the relationship between credit intermediation cost and credit information sharing is conditional on banking market concentration. Third, our findings suggest that governance quality moderates the effect of credit information sharing on credit intermediation cost. Finally, we find that banking market concentration reduces credit intermediation cost, but the effect is moderated by credit information sharing. Overall, our findings suggest that credit information sharing may serve as a useful policy tool for achieving financial sector stability in developing countries.

Keywords: Credit information sharin, Developing countries, Banking market concentration, Governance

JEL Classification: G14, G21, G38

Suggested Citation

Fosu, Samuel and Fosu, Samuel and Danso, Albert and Agyei-Boapeah, Henry and Ntim, Collins G., Credit Information Sharing and Bank Loan Pricing: Do Concentration and Governance Matter? (June 21, 2020). Fosu, S., Danso, A., Agyei-Boapeah, H., & Ntim, C.G. (2020). Credit information sharing and bank loan pricing: Do concentration and governance matter?, International Journal of Finance and Economics, Forthcoming., Available at SSRN: https://ssrn.com/abstract=3632187

Samuel Fosu

De Montfort University ( email )

Leicester, LE1 9BH
United Kingdom

University of Birmingham - Birmingham Business School ( email )

Edgbaston Park Road
Birmingham, B15 2TY
United Kingdom

Albert Danso

Leicester Castle Business School

The Gateway
Leicester, LE1 9BH
United Kingdom

Henry Agyei-Boapeah

University of York - The York Management School

Sally Baldwin Buildings
Heslington
York, North Yorkshire YO10 5DD
United Kingdom

Collins G. Ntim (Contact Author)

University of Southampton Business School, UK ( email )

Southampton Business School
Highfield
Southampton, England SO17 IBJ
United Kingdom
+44 (0) 238059 4285 (Phone)
+44 (0) 238059 3844 (Fax)

HOME PAGE: http://www.southampton.ac.uk/business-school/about/staff/cgn1n11.page

University of Southampton ( email )

Southampton, SO17 1BJ
United Kingdom

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