Credit information sharing and bank loan pricing: do concentration and governance matter?

Fosu, Samuel, Danso, Albert, Agyei-Boapeah, Henry and Ntim, Collins G (2021) Credit information sharing and bank loan pricing: do concentration and governance matter? International Journal of Finance and Economics, 26 (4). pp. 5884-5911. ISSN 1076-9307

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Abstract

The development of credit information sharing schemes in developing countries has gained significant attention in recent times along with ongoing financial sector reforms. In this paper, we provide first-hand evidence of the effect of credit information sharing on credit intermediation cost in these countries, and consequently ascertain the extent to which the credit information sharing–credit intermediation cost nexus may be accentuated by banking market concentration and governance quality. Using a large dataset covering 272 banks from 27 African countries over the 2004–2012 period, we uncover four new findings. First, we find that credit information sharing does reduce credit intermediation cost. Second, we show that the relationship between credit intermediation cost and credit information sharing is conditional on banking market concentration. Third, our findings suggest that governance quality moderates the effect of credit information sharing on credit intermediation cost. Finally, we find that banking market concentration reduces credit intermediation cost, but the effect is moderated by credit information sharing. Overall, our findings suggest that credit information sharing may serve as a useful policy tool for achieving financial sector stability in developing countries.

Item Type: Article
Keywords: Africa, banking market concentration, credit information sharing, credit intermediation cost, developing countries, governance
Schools and Departments: University of Sussex Business School > Accounting and Finance
SWORD Depositor: Mx Elements Account
Depositing User: Mx Elements Account
Date Deposited: 11 May 2022 11:51
Last Modified: 11 May 2022 12:00
URI: http://sro.sussex.ac.uk/id/eprint/105830

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