Template-type: ReDIF-Paper 1.0
Author-Name: Angelo D'Andrea
Author-Name: Nicola Limodio
Title:High-Speed Internet, Financial Technology and Banking in Africa
Abstract:This paper provides empirical evidence on the effect of high-speed internet on financial technology and banking in Africa. Our test combines data on 551 banks and 28,171  firms with the staggered arrival of  fibre-optic submarine cables in Africa. High-speed internet promoted private-sector lending by banks, and credit and sales by  firms. These results are consistent with an extensive adoption of financial technologies, like real-time gross settlement systems (RTGS), lowering transaction costs in African interbank markets. We find that liquidity management considerably changed for banks being weak interbank users prior to high-speed internet. In fact, such banks lowered their internal liquidity hoarding by 10%, increased interbank transactions by 40% and expanded lending by 37%. Analogously,  firms in countries with weak pre-existing interbank markets presented stronger effects at the cable arrival. These results are consistent with high-speed internet promoting financial technology adoption, liquidity and credit.
Classification-JEL:G2, G21, O16, O12
Keywords:Fintech, Banking, Investment, Financial Development
Length: 65
Number: 19124
Creation-Date: 2019
File-URL: https://repec.unibocconi.it/baffic/baf/papers/cbafwp19124.pdf
File-Format: application/pdf
File-Size: 830
Handle: RePEc:baf:cbafwp:cbafwp19124