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Credit Growth in Sub-Saharan Africa—Sources, Risks, and Policy Responses
Author:
Ms. May Y Khamis
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and
Mr. Plamen K Iossifov
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Series:
IMF Working Papers
Volume/Issue:
Volume 2009: Issue 180
Language:
English
Publication Date:
01 Aug 2009
DOI:
https://doi.org/10.5089/9781451873276.001
ISBN:
9781451873276
ISSN:
1018-5941
Pages:
29
Keywords:
WP; private sector; SSA country; Sub-Saharan Africa
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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In this paper, we analyze credit growth in Sub-Saharan Africa over the past decade focusing on the post-2002 rapid credit growth in select countries. We develop regression models of the fundamental determinants of bank credit and use them to examine whether they can fully explain developments in rapid credit growth countries. We then argue that rapid credit expansion, whether a manifestation of a credit boom or driven by fundamentals, can give rise to prudential and macroeconomic risks. We detail these risks and discuss the choice of policies to mitigate them. We conclude by evaluating the likely impact of the ongoing global recession and financial crisis on credit growth in Sub-Saharan Africa.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund
Volume 2009: Issue 180