nep-afr New Economics Papers
on Africa
Issue of 2017‒01‒22
four papers chosen by
Sam Sarpong
The University of Mines and Technology

  1. Essential Information Sharing Thresholds for Reducing Market Power in Financial Access: A Study of the African Banking Industry By Asongu, Simplice; Le Roux, Sara; Tchamyou, Vanessa
  2. Social Mobility among Christian Africans: Evidence from Anglican Marriage Registers in Uganda, 1895-2011 By Meier zu Selhausen, Felix; van Leeuwen, Marco; Weisdorf, Jacob
  3. Beyond Traditional Microfinance: Financial Inclusion for Unbanked Kenyans By Ali, Abdelrahman Elzahi Saaid
  4. Profitability and Crisis in the South African Economy By Malikane, Christopher

  1. By: Asongu, Simplice; Le Roux, Sara; Tchamyou, Vanessa
    Abstract: This study investigates the role of information sharing offices (public credit registries and private credit bureaus) in reducing market power for financial access in the African banking industry. The empirical evidence is based on a panel of 162 banks from 42 countries for the period 2001-2011. Three simultaneity-robust empirical strategies are employed, namely: (i) Two Stage Least Squares with Fixed Effects in order to account for simultaneity and the observed heterogeneity; (ii) Generalised Method of Moments (GMM) to control for simultaneity and time-invariant omitted variables and (iii) Instrumental Variable Quantile regressions to account for simultaneity and initial levels of financial access. In order to ensure that information sharing offices influence market power for loan price (quantity) to decrease (increase), public credit registries should have between 3.156% and 3.3% coverage, while private credit bureaus should have between 1.443 and 18.4% coverage. The established thresholds are cut-off points at which information sharing offices completely neutralise the negative effect of market power on financial access. The thresholds are contingent on the dimension (loan price versus loan quantity) and distribution (conditional mean versus conditional distribution) of financial access.
    Keywords: Financial access; Market power; Information sharing
    JEL: G20 G29 L96 O40 O55
    Date: 2016–09
  2. By: Meier zu Selhausen, Felix; van Leeuwen, Marco; Weisdorf, Jacob
    Abstract: This article uses Anglican marriage registers from colonial and post-colonial Uganda to investigate long-term trends and determinants of intergenerational social mobility among Christian African men. We show that the colonial era opened up new labour opportunities for our African converts enabling them to take large steps up the social ladder regardless of their social origin. Contrary to the widespread belief that British indirect rule perpetuated the power of pre-colonial African elites, we show that a remarkably fluid colonial labour economy actually undermined their social advantages. Sons of traditional landed chiefs gradually lost their high social-status monopoly to a new commercially-orientated and well-educated class of Anglican Ugandans, who mostly came from non-elite and even lower-class backgrounds. We also document that the colonial administration and the Anglican mission functioned as key steps on the ladder to upward mobility, and that mission education helped provide the skills and social reference needed to climb it. These social mobility patterns persisted throughout the post-colonial era despite rising informal labour during Idi Amin's dictatorship.
    Keywords: Chiefs; Christian Missionaries; Indirect Colonial Rule; Labour History; Social mobility; Uganda
    JEL: J62 O15
    Date: 2017–01
  3. By: Ali, Abdelrahman Elzahi Saaid (The Islamic Research and Teaching Institute (IRTI))
    Abstract: This study investigates whether Kenya would be able to achieve better financial inclusion by going beyond traditional microfinance through the adoption of mobile microfinance, rather than just transfering and receiving through mobile money. The study used survey and structured questionnaires to check the readiness of the unbanked Kenyan community, microfinance providers, mobile operators, and the government for adopting effective mobile microfinance. The results showed that the unbanked Kenya are engaged in microfinance enabled jobs such as self-employment and retailers. The community, which was found to be highly connected with mobile phone has a lower awareness of mobile microfinance. While respondents admitted using electronic payment on limited situations, cash is still the dominated medium of making payment. Since the unbanked Kenyan are living in remote areas, mobile microfinance would help to improve their access to finance through reducing the cost of services, minimizing the physical distance to the access point, better documentation, and improving outreach by opening the untapped markets. The results recommend that mobile microfinance intuitions and mobile operators need to exert joint efforts to promote more awareness and develop appropriate mobile microfinance products. On the other hand, the regulator intervention is needed to eradicate barriers such as high tariff, bad corporate governance, and dispute resolution.
    Keywords: Financial Inclusion; Mobile Microfinance; unbanked community
    JEL: G21 O10
    Date: 2016–06–12
  4. By: Malikane, Christopher
    Abstract: Based on new quarterly estimates of the general rate of profit over 1960-2016, this paper shows that the South African economy experienced two phase changes in the pace and rhythm of capital accumulation. The rate of profit exhibits a cyclical tendency to fall, mainly driven by the tendency of capital intensity to rise. The economy experienced a crisis of absolute overproduction of capital in the mid-1980s. This crisis was not only characterised by stagnation in the mass of profits, it was also characterised by a halt in capital accumulation. Thereafter, the rate of profit recovered primarily because of the fall in the capital-output ratio but it failed to reach the levels seen in the 1970's. We estimate that in 2012, the South African economy entered a new and on-going crisis of overproduction of capital characterised by stagnant profits and prolonged overaccumulation, which makes it impossible for economic growth to recover.
    Keywords: falling rate of profit, capital intensity, overproduction of capital, overaccumulation
    JEL: B5 E11 O5
    Date: 2017–01–03

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