EFFICIENCY OF COMMERCIAL BANKING IN THE GAMBIA

We examined the efficiency of the Gambia's financial sector in terms of the functions of a financial sector. These functions are: i) the provision of financial resources to meet borrowing needs of individuals and households, enterprises and governments. ii) the provision of facilities to collec...

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Bibliographic Details
Published in:African review of money, finance, and banking finance, and banking, 2004-01, p.31-50
Main Author: Agu, C.C.
Format: Magazinearticle
Language:English
Subjects:
Allocative efficiency
Bank assets
Bank loans
Bank markets
Banking industry
Commercial banking
Commercial banks
Economic efficiency
Efficiency metrics
Savings
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Summary:We examined the efficiency of the Gambia's financial sector in terms of the functions of a financial sector. These functions are: i) the provision of financial resources to meet borrowing needs of individuals and households, enterprises and governments. ii) the provision of facilities to collect and invest savings funds; and iii) the provision of a sound payments mechanism. These functions are translated into payments mechanism delivery functions, intermediation or allocative function and operational function. We also examined the impact of regulation in the performance of these functions. The Gambia, a small open country of West Africa, has an oligopolistic banking market. There are six commercial banks in the system with two of them controlling more than 50 percent of the market. Evidence from our analysis indicates that the Gambia's banking system has not performed the functions as efficiently as it ought to. The causes of inefficiencies in the performance of the various functions include the heavy regulatory framework, the oligopolistic market structure and the small banking market.
ISSN:1124-3163