Browsing by Author "Nomandla, Inga"

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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.