2012年-IMF国际货币组织全球_Assessing_Bank_Competition_within_the_East_African_Community_25页_1mb

Summary of "Assessing Bank Competition within the East African Community"

Core Content

This working paper provides an empirical analysis of the level of competition in the banking systems of four East African Community (EAC) countries: Kenya, Tanzania, Uganda, and Rwanda. The study examines both structural and empirical indicators of competition and identifies the factors that influence it.

Main Views

1. Low Level of Competition

• The banking sector in the EAC is characterized by low competition, despite regulatory liberalization and structural reforms.
• The degree of competition is strongly linked to economic development, market contestability, and institutional quality.
• The EAC banking systems are described as operating under monopolistic competition, with Kenya showing the highest level of competitiveness, followed by Tanzania, Uganda, and Rwanda.

2. Structural Measures of Competition

• Concentration ratios (share of assets held by the largest banks) indicate that the market structure in EAC countries is more competitive than that of South Africa.
• However, bank spreads (difference between lending and deposit rates) and return on assets (ROA) suggest that banks are more profitable in EAC than in South Africa, which is indicative of less competition.
• Regulatory barriers to entry and exit are minimal, but informal barriers such as population size, macroeconomic volatility, and market size also play a role in limiting competition.

3. Empirical Measures of Competition

• The paper estimates two nonstructural measures of competition: the Lerner Index and the Panzar and Rosse H-statistic.
• The Lerner Index is the preferred measure as it is computed at the bank level, and its accuracy does not depend on equilibrium in the banking system.
• The H-statistic is used to compare the EAC as an aggregated unit with other countries. It measures the response of revenues to input price changes.

4. Empirical Findings

• The Lerner Index for the EAC countries ranges from 29% to 36%, indicating that banks price their services 29–36% above marginal cost.
• The H-statistic for the EAC ranges from 0.24 (Rwanda) to 0.60 (Kenya), suggesting a monopolistic competition structure.
• The H-statistic in Kenya is 0.60, which is close to perfect competition, while Rwanda's H-statistic is 0.24, closer to monopoly.

Key Information

1. Financial Inclusion and Access to Services

• Financial inclusion remains low in the EAC region, with less than a third of the population in Rwanda, Tanzania, and Uganda having access to the formal financial system.
• Kenya has the highest access to formal financial services at 40%, while Rwanda has the lowest at 21%.
• Informal financial services are still widely used, even in more developed markets like Kenya and Uganda.

2. Banking System Characteristics

• The banking systems in EAC countries are similar in terms of cost structures, revenue structures, and profitability.
• Liquidity preference is high in the EAC, with net loans to assets ranging between 40% and 60% on average.
• Kenya has the highest ratio of loans to total assets, while South Africa has a lower ratio, indicating a more liquid banking system in Kenya.

3. Data and Methodology

• The study uses bank-level data from 2001 to 2008 from the Bankscope database.
• The Lerner Index is calculated using the translog cost function, which allows for the estimation of marginal costs.
• The H-statistic is derived from a log-linear revenue equation that includes variables for bank size, portfolio mix, and input prices.

4. Policy Implications

• The lack of competition in the EAC banking sector is a constraint on growth and financial inclusion.
• The paper recommends further reforms to increase competition, including improving institutional quality, reducing informal barriers, and promoting market contestability.

Structure and Key Tables

Tables

• Table 1: Summarizes bank regulation across EAC countries, highlighting entry requirements, capital adequacy, and restrictions on activities.
• Table 2: Provides summary statistics for the EAC banking systems, including net loans to total assets, deposits to liabilities, and cost structures.
• Table 3: Compares the Lerner Index over time for EAC countries.
• Table 4: Compares the H-statistic across EAC countries and the overall EAC.

Figures

• Figure 1: Shows financial intermediation in the EAC and South Africa, highlighting the low level of credit and deposits relative to GDP.
• Figure 2: Compares market structure and performance indicators (concentration ratio, interest rate spread, and ROA) between EAC countries and South Africa.
• Figure 3: Displays liquidity indicators (liquid assets and loans as a percentage of total assets) for Kenya and South Africa.

Conclusion

The paper concludes that the EAC banking sector is not fully competitive, despite regulatory reforms and the entry of new participants. The main determinants of competition include economic development, market contestability, and institutional quality. The Lerner Index and H-statistic are both used to measure the degree of competition, with the Lerner Index being the preferred measure due to its bank-level analysis and independence from equilibrium assumptions. The findings suggest that reforms should focus on improving institutional frameworks, reducing informal barriers, and enhancing market contestability to increase banking sector competition and financial inclusion.