African Development Finance Journal

Bancassurance: Does it influence efficiency on banking sector?

Erick Lusekelo Mwambuli, Jenipher Aron — Mon, 28 Apr 2025 05:55:07 +0000

The study was conducted to evaluate the impact of bancassurance on the efficiency of banks in Tanzania, focusing on customer satisfaction levels, and bancassurance penetration. Data collection method involved questionnaires, annual financial reports from major Tanzanian banks offering bancassurance services and regulatory publications from Tanzania Insurance Regulatory Authority (TIRA) and Bank of Tanzania (BOT). The results indicated that high customer satisfaction positively influences bank efficiency by boosting revenue and customer retention also bancassurance penetration enhances bank efficiency through economies of scale and better resource utilization. Main limitations of the study were the disclosure and availability of bancassurance data from the banks involved in this activity, mostly did not provide the data or provided data which could not affect analysis. Policy implications include encouraging banks to adopt best practices in customer service and operational management to maximize the benefits of bancassurance. The study highlights the importance of a supportive regulatory framework that fosters bank-insurance collaborations, promoting financial inclusion and stability. Furthermore, enhanced customer satisfaction is also essential, as satisfied customers contribute to long-term cost efficiency. Banks are encouraged to streamline claims processes, improve digital services, and provide robust customer service to strengthen client loyalty and profitability.

Keywords: Bancassurance, Bancassurance Penetration, Customer Satisfaction, Efficiency

Financial Reporting Quality and International Financial Reporting Standard (IFRS) Adoption in Nigeria

AUDU Omoakele Gabriel, KEN- OTOKITI Doris — Mon, 28 Apr 2025 00:00:00 +0000

The study aims to determine how financial reporting quality of Nigerian enterprises relates with International Financial Reporting Standards (IFRS). The study adopted the descriptive statistical design, the study sample is made up of 14 listed deposit money banks (DMBs) listed in Nigeria Exchange. Secondary data were extracted from those companies for both pre and post IFRS era in Nigeria. The study found that IFRS affects the financial reporting quality of Nigerian Stock Exchange-listed companies. Before and after IFRs, financial statements meant different things. Financial statements under Pre-IFRS and Post-IFRS were equally reliable. The research recommends that the Financial Reporting Council (FRC) promote IFRS adoption in Nigeria through aggressive awareness initiatives. To increase IFRS awareness, expertise, and use, regulatory and professional bodies should finance field-specific training.

Keywords: Financial Reporting Quality, International Financial Reporting Standard

Front Office Service Activity Products Income and Liquidity of Deposit-Taking Savings and Credit Cooperative Societies in Nairobi City County, Kenya

Kiplagat Kipsuge, Ambrose Jagongo, Farida Abdul — Mon, 28 Apr 2025 06:46:09 +0000

Income from FOSA utility services have also contributed to the liquidity of SACCOs. SACCOs provide utility services such as bill payments, money transfers, and mobile banking services. The provision of these services has attracted more members to the SACCO, increasing their deposit base. The growth in the deposit base has enhanced the liquidity of SACCOs, allowing them to fulfill the financial requirements of their members. Income from FOSA loan products is affected by the high default rates faced by deposit-taking savings and credit cooperative societies in Kenya. Income from FOSA investment products is affected by the risk associated with investment options. Income from FOSA utility services, such as water and electricity bill payments, is affected by the reliability of utility providers. The general objective assessed outcome of the FOSA products’ income on liquidity of deposit taking Sacco’s (DTS). Target population for the study was deposit taking Sacco’s operating within the Nairobi City. Thus, for the unit of analysis in this study, it include all the deposit taking SACCOs operating within Nairobi City. A total of 34 DTS operate in Nairobi City County. Therefore, the target population which was adopted for this study was 34 firms. The study employed the use of mean and standard deviation as part of descriptive statistics for independent variables, namely income from FOSA loan products, income from FOSA investment products and income from FOSA utility services. Hypotheses were tested at a 5% significance level using multiple regression analysis. The study found that income from FOSA loan products wielded a positive and significant effect on liquidity of DTS (Beta value=0.111, p=0.007) with a minimum of 95% confidence level. Additionally, income from FOSA investment products also has a positive and significant effect on the liquidity of DTS (B=0.275), and p value was 0.004 at minimum of 95% confidence level. The study also found out income from FOSA utility services were found to wield positive and significant effect on liquidity of DTS and it was also found firm wielded negative and significant effect on liquidity of DTS. The recommendations are: SACCOs should comply with the liquidity ratio and consider investing surplus cash in profitable projects to increase income instead of holding excess cash for liquidity. Support for the growth of DTS by creating a favorable environment and enacting supportive legislation. The DTS should continuously review their credit policy framework and implement dynamic credit appraisal processes. Management and policymakers should develop strategies to reduce information asymmetry among various stakeholders. Additionally, management should provide qualitative data and information that can aid decision-making. The SACCOs' board of directors should be regularly updated on the firm's liquidity position and promptly informed of any significant changes in current or projected liquidity. SACCOs should appropriately manage liquidity demand and supply to ensure smooth operations, maintain positive stakeholder relationships, and prevent liquidity issues.

Keywords: Front Office Service Activity Products Income, Liquidity, DT SACCOs

Islamic Finance as a Catalyst for Inclusive Growth in the Era of Industry 5.0

Oyekolade Sodiq OYESANYA, Habeebah Simisola FA-YUSUF — Mon, 28 Apr 2025 06:52:04 +0000

Islamic finance is increasingly recognised as an indispensable player in engendering inclusive growth and sustainable development, particularly within the context of Industry 5.0, which prioritizes advanced technologies and human-centric approaches. This paper explores how Islamic finance principles conform to the broader objectives of Industry 5.0, essentialising its remarkable roles in the promotion of financial inclusion, innovation, and sustainability. Leveraging ethical investment mechanisms and green finance initiatives, particularly green ṣukūk, Islamic finance provides a framework supporting economic development and environmental sustainability. The integration of Islamic finance into Industry 5.0 presents opportunities and challenges. On the one hand, Islamic financial institutions could drive technological advancements and develop innovative products that cater to diverse financial needs while adhering to Sharī’ah compliance. On the other hand, the sector faces enormous challenges related to regulatory frameworks, technological adaptation, and cybersecurity. Addressing these challenges requires a strategic approach to policy development and cross-sector collaboration. Case studies underscore the successful implementation of Islamic finance initiatives that contribute to sustainable development. For example, green ṣukūk issued by various countries demonstrates how Islamic finance could facilitate large-scale environmental projects while conforming to both financial and ethical standards. These initiatives not only enhance the role of Islamic finance in global markets but also promote inclusive growth by providing funding for projects that benefit underserved, marginalised, and vulnerable communities. The paper concludes with policy recommendations to bolster the effectiveness and efficiency of Islamic finance in the Industry 5.0 era. Future research and collaborative efforts are essential to fully optimise and realise the potential of Islamic finance in driving inclusive and sustainable growth, ensuring that it remains a robust and relevant component of the global financial system.

Keywords: Islamic Finance, Industry 5.0, Inclusive Growth, Sustainable Development

Long Term Impact of Information and Communication Technology on Corridors Performance

Flory Okandju Okonge, George Nyaronga — Mon, 28 Apr 2025 08:06:46 +0000

Transport corridors play a crucial role in facilitating regional trade and economic integration. The Central Corridor, connecting the Port of Dar es Salaam to several landlocked countries, has increasingly adopted Information and Communication Technology (ICT) solutions to enhance logistics efficiency, trade facilitation, and sustainability. This study examines the long-term impact of ICT on corridor performance using a mixed-methods approach. Qualitative analysis, conducted through NVivo, explores policy frameworks and stakeholder perspectives, while quantitative assessment, using Structural Equation Modeling (SEM), evaluates ICT’s effects on logistics efficiency, economic growth, and trade facilitation. Findings indicate that ICT adoption significantly improves corridor performance by reducing transit delays, enhancing cargo tracking, and streamlining customs clearance. However, challenges such as regulatory misalignment, infrastructure disparities, and cybersecurity risks hinder full ICT integration. The study highlights the need for continuous investment in digital infrastructure, policy harmonization, and stakeholder collaboration to maximize ICT’s long-term benefits. These insights contribute to the broader discourse on digital transformation in transport corridors and provide policy recommendations for sustainable corridor management.

Keywords: Transport corridors, ICT adoption, logistics efficiency, trade facilitation, digital infrastructure, economic growth, regulatory alignment, cybersecurity, structural equation modeling (SEM)

The impact of Exchange Rate Variability and Volatility on Economic Growth: Evidence from Nigeria

Mon, 28 Apr 2025 08:13:18 +0000

This paper focuses on investigating the impact of exchange rate variability and volatility on Nigeria’s economic growth for a period of thirty-three years while also looking at the causal impact of interest rate and inflation on real gross domestic product using values from year 1990 up to 2023. The importance of this study is premised on the fact that Nigeria being an import dependent nation of a sort, an understanding of the relationship and impact of the aforementioned variables is needed for proper macroeconomic management. Drawing from a background of the understanding of the investment-savings and liquidity-money model, the weighted least square analytic method was used. Results from the study showed that exchange rate exhibits a direct and positive relationship with the growth rate of real gross domestic product but the impact is low. Inflation rate also showed a negative relationship with the growth rate of real gross domestic product, interest rate is inversely related to the growth of real gross domestic product. This makes it imperative as recommended that import substitution should be embarked upon by deliberately incentivising local producers and investors through concessionary interest rates.

Keywords: Exchange Rate Variability, Exchange Rate Volatility, Economic Growth