Bank Behavior in Developing Countries: Evidence from East Africa

25 Pages Posted: 3 Mar 2006

See all articles by Richard Podpiera

Richard Podpiera

International Monetary Fund (IMF); Charles University in Prague - CERGE-EI (Center for Economic Research and Graduate Education - Economics Institute)

Martin Čihák

International Monetary Fund (IMF)

Date Written: June 2005

Abstract

We analyze the structure, performance, and role of banking systems in the three member countries of the East African CommunityKenya, Tanzania, and Ugandaagainst the backdrop of recent financial sector reforms. Focusing on the behavior of different types of banks, we find no support for the argument that the presence of large international banks would have an adverse effect on the effectiveness and efficiency of banking sectors in developing countries. International banks are generally more efficient and more active in lending than domestic banks. However, as suggested by the Kenyan experience, the presence of international banks may not lead to increased competition and provision of banking services if weak institutions are allowed to remain in the system.

Keywords: Banks, East Africa, financial sector reforms

JEL Classification: G21, G28, N27

Suggested Citation

Podpiera, Richard and Cihak, Martin, Bank Behavior in Developing Countries: Evidence from East Africa (June 2005). IMF Working Paper, Vol. , pp. 1-25, 2005. Available at SSRN: https://ssrn.com/abstract=887998

Richard Podpiera

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Charles University in Prague - CERGE-EI (Center for Economic Research and Graduate Education - Economics Institute) ( email )

P.O. Box 882
7 Politickych veznu
Prague 1, 111 21
Czech Republic
+42 02 240 05 242 (Phone)
+42 02 242 27 143 (Fax)

HOME PAGE: http://www.cerge-ei.cz

Martin Cihak (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street N.W.
Washington, DC 20431
United States

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