In the last decade, there has been a broad deepening of the banking sector, with a notable expansion of financial access and strengthening of regulation across sub-Saharan Africa. Despite this progress, the banking sector in the region continues to suffer from a lack of competition, high borrowing costs, low levels of credit and a concentration of bank lending in the extractive sector. Interbank markets have a role to play in enabling economic growth, but this will only happen if efforts are made to develop and deepen them across sub-Saharan Africa.
This synthesis report provides evidence on interbank markets in the sub-Saharan African context, drawing on existing literature and research by the FCDO-ESRC funded Development and Economic Growth Research Programme (DEGRP). The authors present a landscape of interbank markets, analyse recent evidence on the factors that hinder their development, and draw attention to the policy implications for financial regulators.