Theses and Dissertations

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http://hdl.handle.net/20.500.11837/337

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Browsing Theses and Dissertations by Author "Kapingura, FM"

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    Determinants of financial sector development in the Southern African Development Community (SADC) region
    (University of Fort Hare, 2024-05-07) Nomandla, Inga; Kapingura, FM; Ngonyama, N
    The study examines the determinants of financial sector development in the SADC region for the period 2006-2020. Six models for financial sector development were estimated using the Generalized Method of Moments (GMM) estimation technique. The study focused on macroeconomic, geographic, and institutional variables. In the banking sector model, both geographic factors have a positive effect on financial sector development. However, population growth has a significant effect whilst population density has an insignificant effect on financial development. When it comes to macroeconomic factors, Foreign Direct Investment (FDI) has significant positive effect on financial development whilst GDP has insignificant positive effect on financial development. Both institutional factors show a positive effect on financial development but, the rule of law has a significant effect whereas government effectiveness has an insignificant effect on financial development. When it comes to the financial market, both geographic factors thus population growth and population density have statistically significant negative effects on financial sector development. Macroeconomic factors reveal that GDP is positively related to financial development and the effect is insignificant. Conversely, FDI has a statistically significant negative connection with financial development. Lastly, both institutional factors have significant relationships with financial development. However, political stability has a negative relationship with financial development, but the rule of law is positively related to financial development. The empirical findings underscore the importance of strengthening the rule of law to foster financial sector stability. Additionally, increasing interest rates can incentivize banks, thereby promoting financial development and economic stability.
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    Financial sector reforms and banking stability in the Southern African Development Community (SADC)
    (University of Fort Hare, 2024-11-29) Ndubela, Ayavuya; Lawana, N; Kapingura, FM
    The banking sector plays a very critical role to the development of a country. However, in the Southern African Development Community region, in some member countries the banking sector is not well developed. The region continues to encounter major obstacles in the growth of its banking sector, which impedes the rate of economic development, even after implementing several measures to strengthen the banking industry, non-banking sector, and financial markets. Reducing government involvement, opening financial markets, and fortifying financial institutions are all part of the financial sector reforms that has been a key element of developing countries' structural adjustment plans. Despite these reforms, the majority of Southern African countries still have relatively weak financial systems. The literature on financial sector development does also highlight that the reforms which maybe implemented in the sector may also influence the stability of the financial system which may create instability and thwart any growth prospects. The aim of any economy whether developed or developing is to achieve stability, reduce unemployment and sustain economic development through macroeconomic policy which these SADC countries aim to achieve. Given this background, the study examined the effect of financial sector reforms on banking stability in the SADC region for the period from 2013 to 2023 employing the Generalized Method of Moments. The study was underpinned by the financial liberalization theory of McKinnon and Shaw (1973) which shows how financial reforms can result in the development of the banking sector. The findings reveal that proper implementation of financial sector reforms (any changes in banking regulation) results in banking stability. This provides valuable insights for policymakers to design effective strategies for promoting financial sector reforms and banking stability in the SADC region.