Factors Affecting The Development Of Commercial Banks In Sub-Saharan Africa

Sub-Saharan Africa has achieved rapid economic development in recent years.One of the important reasons is the development of finance.As an important component of traditional finance,commercial banks effectively support local economic growth.Compared with other parts of the world,banks in sub-Saharan Africa have relatively higher profits and are growing faster.Therefore,studying the influencing factors of the development of commercial banks in all countries of sub-Saharan Africa has strong practical significance.This paper empirically tests the impact of the development of commercial banks in all countries in sub-Saharan Africa.By selecting the 2003-2015 data of all countries in sub-Saharan Africa as samples,an unbalanced panel data model was constructed and the parameters were estimated by using mixed OLS regression,fixed effects and random effects methods.The main explanatory variables selected by the empirical test include economic growth,total population,and money supply(ie,liquidity).In addition,in order to reflect the influence of African regional cultural factors on the development of commercial banks,we chose whether to use English as a dummy variable for analysis.The empirical results show that economic growth and population have significantly promoted the development of commercial banks in the region,and that countries using English as their official language are approximately 27%more developed than national commercial banks that do not use English.However,liquidity does not significantly promote the development of commercial banks.At last,the paper tests the above results and finds that the population is highly correlated with economic growth.In order to reflect the influence of each on the development of commercial banks,they are put into different models for regression.The Hausman test results show that the fixed effect is more appropriate.The above conclusions have important policy implications for the development of commercial banks in Africa.That is,they suggest that commercial banks should focus on the common language that they associate with customers.At the same time,commercial banks should not only focus on internal policies,but should consider the macroeconomic environment to formulate strategies to promote their development.