Effects of Institutional Reforms on Financial Sector Development in Selected East Africa Community Member States
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Date
2019-06
Authors
Mukiri, David Mwiti
Journal Title
Journal ISSN
Volume Title
Publisher
Kenyatta University
Abstract
In the East African region many institutional reforms has been undertaken to foster
financial sector development. However, the contribution of these reforms to financial
sector development in this region remains unimpressive compared to other developing
economies in Africa. This study seeks to investigate the effects of institutional
reforms on financial sector development in Kenya, Uganda and Tanzania. The
objectives of the study were to: determine the effect of regulatory quality reforms on
financial sector development in Kenya, Uganda and Tanzania; determine the effect of
reforms in accessing information on financial sector development in Kenya Uganda
and Tanzania; and establish the effect of reforms in reducing corruption on the
financial sector development in Kenya, Uganda and Tanzania. Secondary panel data
were collected from electronic secondary sources such as World Bank, International
Monetary Fund, Central Banks, previous surveys, financial reports and regulatory
authorities’ data bases in the respective countries for the periods spanning from 1987
to 2016. An exploratory study design involving econometric analytic techniques was
used to analyze the data collected. In this study, panel data model was used to analyze
panel data and estimate the effects of institutional reforms on financial development
in Kenya, Uganda and Tanzania. The study found that regulatory quality and access to
information have a significant effect on financial sector development in Kenya,
Uganda and Tanzania. In addition the study found out that corruption had a negative
and significant effect on financial sector development in Kenya, Uganda and
Tanzania. The study concluded that regulatory quality and access to information are
important aspects in financial sector development. However corruption slows down the development of the financial sector. In addition, institutions play a key role in financial sector development. The study recommends that suitable institutional
changes ought to be started so as to enhance transparency and responsibility of open establishments, common administration, upholds strict controls and prudential guide for business exercises.
Description
A Research Project Submitted to Department of Applied Economics in Partial Fulfillment of the Requirements for the Award of Master of Economics (Finance) Degree of Kenyatta University June, 2019
Keywords
Institutional Reforms, Financial Sector Development, East Africa Community Member States