dc.contributor.author | Ambunya, Naaman N. | |
dc.date.accessioned | 2013-05-07T10:56:08Z | |
dc.date.available | 2013-05-07T10:56:08Z | |
dc.date.issued | 2003 | |
dc.identifier.uri | http://erepository.uonbi.ac.ke:8080/xmlui/handle/123456789/19765 | |
dc.description | Master of Arts in Economics | en |
dc.description.abstract | This paper traces the impact of financial liberalisation on financial deepening and
growth through the increment in credit channel to the private sector following financial
deregulation. Based on the evidence of the sample period 1991-2002, it was found that
the growth of the financial sector and the real sector moved interdependently in the
period of financial liberalization (reverse-causation) in Kenya. Deepened financial
institutions makes it possible for credit availability and capital (including the foreign
finance element) that would otherwise either be unavailable in the absence of financial
institutions or would be expensive to borrow under a system of financial repression.
Economic growth on the other hand is expected to raise income levels and hence savings
mobilisation through the interest rate channel. Consequently, the efforts in liberalization
and reforms that are designed to improve efficiency of financial intermediaries will lead
to economic growth by increasing demand and supply of credit to the productive private
sector enterprises. Economic growth on the other hand could contribute to the growth of
the financial sector if the demand for financial services increases. The results show that
financial reforms undertaken in Kenya impacted positively on economic performance.
There was an improvement in financial deepening but deeper financial liberalisation still
needs to be undertaken. Credit to the private sector continued to rise. It appears that the
outcome of the process of financial liberalization is better than the period of financial
repression since access to credit rose following liberalization and other financial
services have been developed (financial innovation). Therefore, further liberalization of
the sector would be beneficial to growth. | en |
dc.language.iso | en | en |
dc.title | Financial liberalization and economic growth in Kenya: a var analysis | en |
dc.type | Thesis | en |
local.publisher | Department of Economcs, University of Nairobi | en |