Bank Efficiency and Competition in Low-Income Countries: The Case of Uganda

31 Pages Posted: 3 Mar 2006

See all articles by David Hauner

David Hauner

International Monetary Fund (IMF) - African Department

Shanaka Peiris

International Monetary Fund (IMF) - African Department

Date Written: December 2005

Abstract

There is a concern that the state-dominated, inefficient, and fragile banking systems in many low-income countries, especially in sub-Saharan Africa, are a major hindrance to economic growth. This paper systematically analyzes the impact of the far-reaching banking sector reforms undertaken in Uganda to improve competition and efficiency. Using models that have been previously used only in industrial countries, we find that the level of competition has increased significantly and has been associated with a rise in efficiency. Moreover, on average, larger banks and foreign-owned banks have become more efficient, while smaller banks have become less efficient in the face of increased competitive pressures.

Keywords: Banks, Competition, Efficiency, Data Envelopment Analysis

JEL Classification: G21, G34

Suggested Citation

Hauner, David and Peiris, Shanaka, Bank Efficiency and Competition in Low-Income Countries: The Case of Uganda (December 2005). IMF Working Paper, Vol. , pp. 1-31, 2005. Available at SSRN: https://ssrn.com/abstract=888109

David Hauner (Contact Author)

International Monetary Fund (IMF) - African Department ( email )

1700 19th Street, NW
Washington, DC 20431
United States

Shanaka Peiris

International Monetary Fund (IMF) - African Department ( email )

1700 19th Street, NW
Washington, DC 20431
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
457
Abstract Views
1,567
rank
62,521
PlumX Metrics