Journal Article


Reducing information asymmetry with ICT: A critical review of loan price and quantity effects in Africa

Abstract

Purpose. 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. Design/methodology/approach. The empirical evidence is based on a panel of 162 banks in 42 African countries for the period 2001-2011. Misspecification errors associated with endogenous variables and unobserved heterogeneity in financial access are addressed with. Generalised Method of Moments and Instrumental Quantile Regressions. Findings. Our findings uncover several major themes. First, ICT when integrated with the role of public credit registries significantly lowered the price of loans and raised the quantity of loans. Second, while the net effects from the interaction of ICT with private credit bureaus do not improve financial access, the corresponding marginal effects show that ICT could complement the characteristics of private credit bureaus to reduce loan prices and increase loan quantity, but only when certain thresholds of ICT are attained. We compute and discuss the policy implications of these ICT thresholds for banks with low, intermediate and high levels of financial access. Originality/value.This is one of the few studies to assess how the growing ICT can be leveraged in order to reduce information asymmetry in the banking industry with the ultimate aim of improving financial access in a continent where lack of access to finance is a critical policy syndrome.

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Authors

Asongu , Simplice
Le Roux, Sara
Nwachukwu, Jacinta
Pyke, Chris

Oxford Brookes departments

Oxford Brookes Business School\Oxford Brookes Business School\Department of Accounting, Finance and Economics

Dates

Year of publication: 2019
Date of RADAR deposit: 2018-06-20


Creative Commons License This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License


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This RADAR resource is the Accepted Manuscript of Reducing information asymmetry with ICT: A critical review of loan price and quantity effects in Africa

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  • Owner: Daniel Croft
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