International Journal of Business and Social Science

ISSN 2219-1933 (Print), 2219-6021 (Online) DOI: 10.30845/ijbss

The Effect of Regional Classification on Bank Efficiency in Africa
Roseline Oluitan, Hakeem Mobolaji

This study examines the efficiency of the financial sector in African countries based on the five regional classifications. It investigates the relevance of the financial institutions in ensuring efficient distribution of economic resources. Empirical evidence supports a sound intermediation process and efficiency in the banking system (Vittas, 1991; Howard & Haynes, 2001). The paper estimates the cost function with the use of a singleoutput (loans) and multi-input approach. The input variables consist of capital, deposits and labour (overhead). The study observes that regions with more high income countries are less efficient hence made postulations in respect of the causes for the inefficiency and the possible remedies. The research comprises of Commercial banks from about forty seven African countries for a period of ten years.

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