In most African economies, banks remain the major source of external capital for both large businesses as well as small enterprises, and indeed for the private sector and the economy as a whole. However, there remain well-documented impediments to the flow of credit, especially to micro, small and medium sized enterprises (MSMEs). The major market imperfection is 'asymmetric information'.
The following is an Excerpt from the African Development Report 2014, a flagship publication of the African Development Bank. Regional financial integration has potential to foster financial sector development and inclusive growth.
The Islamic finance industry has been growing rapidly in various regions, and its banking segment has become systemic in some countries, with implications for macroeconomic and financial stability.