Molaba, Kamogkelo2024-06-282024-06-282023Molaba, Kamogkelo. (2023). Linking banking sector competition and access to finance: the case of select Sub-Saharan African countries [Master’s dissertation, University of the Witwatersrand, Johannesburg].https://hdl.handle.net/10539/38777A research report submitted in partial fulfillment of the requirements for the degree of Master of Commerce to the Faculty of Commerce, Law and Management, School of Economics and Finance, University of the Witwatersrand, Johannesburg, 2023Using multi-year firm-level data of 27 Sub-Saharan countries from the World Bank Enterprise Survey (WBES), this study investigates the link between banking sector competition and firms’ access to finance. The paper employs a probit model to measure the link between banking sector competition and access to finance by observing the impact of the four measures of competition namely: CR3, the Panzar and Rosse H-statistic, the Lerner index and the Boone indicator on credit constraints and financing obstacles whilst controlling for certain firm-level and country-level factors. The results are dominantly in line with the market power hypothesis which posits that banking sector competition improves access to finance. Additionally, the link between competition and access to finance depends on other firm-level variables such as top manager experience and industry as well as country-level variables such as institutional quality, credit information and strength of legal rights. The results of this paper are overall consistent with evidence provided by other studies that support the market power hypothesis which suggests that competitive conduct in the banking sector improves access to finance. The policy implications drawn from this study are that policymakers in the SSA region need to implement policies that strengthen competition in the banking sector without hindering efforts to strengthen banks. Policymakers need to also regulate the financing of business by banks to ensure that funds are directed at growing sectors and businesses that will in turn influence the growth of the economyen© 2023 University of the Witwatersrand, Johannesburg. All rights reserved. The copyright in this work vests in the University of the Witwatersrand, Johannesburg. No part of this work may be reproduced or transmitted in any form or by any means, without the prior written permission of University of the Witwatersrand, Johannesburg.Sub-Saharan countrieWorld Bank EnterpriseBankingBanking sectorFinanceUCTDSDG-8: Decent work and economic growthDissertationUniversity of the Witwatersrand, Johannesburg