کارایی واسطه گری بازار مالی در کنیا: تجزیه و تحلیل مقایسه

Wide interest margins as witnessed in Kenya are a sign of a repressed and inefficient financial sector. This paper carries out a cross-country analysis of the determinants of financial market efficiency using panel cointegration with a view to recommending policy options for improving the efficiency of the financial sector intermediation process in Kenya. The study finds that the major contributors to the differences in financial sector inefficiency in Kenya compared to the other countries in the study are high bank operating costs, default risk and financial market structure. The study recommends, among other measures, that the government through the Central Bank need to collaborate with the commercial banks and establish a working credit reference bureau to enable easy identification of credit worthy customers in order to reduce default risk; there is also need by the central bank to license more new banks to increase competition and reduce bank concentration. The study also recommends increased use of technology including phone-banking and e-banking to reduce operation costs of the banks. The paper concludes that contrary to the findings from other cross-country analysis, the factors that lead to financial market in/efficiency varies from one country to the other.

Widening interest rate margins, which is the indicator of financial sector inefficiency in this study is hypothesized to be detrimental for savings mobilization and stifles investment growth. Wide interest margins as witnessed in Kenya are therefore a sign of a repressed and inefficient financial sector. This paper uses panel cointegration and data from 1990 to 2007 to analyze the determinants of the efficiency of the financial sector intermediation process in 11 countries with a view to recommending policy options for reducing the spreads and improving the financial market efficiency in Kenya. The countries are selected from the African region and other developed countries and includes Kenya, South Africa, Uganda, Egypt, Japan, Germany, Malaysia, Poland, Korea, Botswana and USA. The results show that cost inefficiency is important in explaining interest rate margins in Kenya, USA, Korea, Germany and Japan and Poland with the highest impact of cost inefficiency recorded in Kenya at 69%. It is important to note that these other countries have lower spreads than Kenya. It can therefore be inferred from this result that the other countries have lower margins than Kenya because the impact of cost inefficiency on their margins is not as huge as Kenya's. In terms of the magnitude, cost inefficiency is found to be the major determinant of wide margins (market inefficiency) in Kenya. The results also show that the impact of default risk is positive and statistically significant for Kenya. The only countries where default risk is not a problem are South Africa and Poland. Important is the finding that the magnitude of impact of default risk on interest spreads for Kenya is higher than those of all the other countries except Uganda and Botswana. All the other countries except Uganda and Botswana have lower spreads than Kenya. It can be inferred again from this result therefore that default risk is one of the major contributors to the financial market inefficiency in Kenya compared to the other countries. This is because the magnitude of impact is higher in Kenya and therefore margins are higher in Kenya compared to the other countries. Default risk is found to be the second most major contributor to inefficient financial markets in Kenya. The third major factor that is important in explaining the financial market inefficiency in Kenya is bank size (financial market structure). Among the countries with positive coefficients, Kenya reports the second highest magnitude of the impact of financial market structure on market inefficiency. Botswana has the highest coefficient on bank size among the countries with positive coefficients but Botswana also has higher inefficiency (wider spreads) than Kenya. This implies that countries with higher bank size (a less competitive market) would experience wider interest margins than countries with more competitive structures. The result here implies that the nature of the financial market structure in Kenya is one of the major factors that explains the very high interest margins (inefficient financial sector) in Kenya compared to the other countries in the study except Botswana. Stock market activity is found to be an important factor in reducing financial sector inefficiency in Kenya but does not account for cross-country differences in market inefficiency between Kenya and the other countries. Fiscal pressures on the other hand are found to be insignificant in the Kenyan panel and therefore do not explain the differences in market efficiency between Kenya and the other countries. The results show that the factors that lead to market inefficiency in one country are not necessarily the same as the factors that lead to market inefficiency in the other countries.