Testing for the extent of competition among banks in the Southern African Development Community ("SADC") region

Abstract

This paper analyses the competitiveness in the banking sector of eight countries in the SADC region. Both the Panzar-Rosse and the Lerner Index approaches were used for the period 2002- 2013. Although the results yield opposing outcomes, the overall findings suggest that the eight countries cannot be described as being perfectly competitive but rather suggest imperfect competition in these banking sectors. These countries could be characterised as monopolies when using the Panzar-Rosse study and monopolistically competitive when using the Lerner Index.