Browsing by Author "Motelle, Sephooko Ignatius"

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    Competitiveness of the banking industry in the Southern African development community
    (2014) Motelle, Sephooko Ignatius; Biekpe, Nicholas
    The literature is replete with the determinants of economic growth and identifies financial development as one of the important drivers of growth. Financial development is viewed as a process through which financial intermediaries such as banks lubricate the economy by creating a conduit for resources to flow from surplus sectors to deficit sectors. Effective financial development depends on many factors such as financial integration which facilitates international trade and free mobility of capital. However, in order for the positive impact of financial integration to be fully felt on financial development, it must stimulate competition in the domestic banking market without eroding financial stability. Therefore, the central hypothesis of this study is that financial integration can enhance financial development if such integration makes the local banking industry more competitive without increasing its vulnerability to financial instability. The study employs various panel data techniques to test this hypothesis using the Southern African Development Community (SADC) as a case study. The findings reveal that the banking industry in SADC is characterised by monopolistic competition. In addition, financial integration enhances banking competitiveness in the region through removal of barriers to free flow of capital between countries. Furthermore, higher competition is found to be good for financial development as it reduces the magnitude of the financial intermediation spread. Moreover, the study finds that the flipside of financial integration lies in its potential to cause financial instability in the region with negative repercussions for financial intermediation. The findings imply that, even though financial integration is good for financial development through its ability to increase the degree of competition in the banking industry and reduce the spread between lending and deposit rates, member states must put policies in place to effectively prevent the likely erosion of financial stability. No single policy is sufficient on its own to achieve this. Therefore, this study recommends that as members of SADC move towards deeper financial integration, they must ensure that they formulate and implement sound and appropriate common policies in order to ensure that financial stability is not compromised as restrictions to capital-flows are abolished or reduced. Such a policy-mix requires four ingredients, namely; sound financial liberalisation policies, competition policies, macroeconomic policies and regulatory and supervisory policies.
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    Modeling the Africa Diaspora Pension Fund: likely financing instrument for Africa's development infrastructure
    (2018) Mazibuko, Patras; Biekpe, Nicholas; Motelle, Sephooko Ignatius
    The case study research sought to investigate and establish the attitude of the Africa diaspora community, mainly associated with the University of Cape Town, towards the modeling of a diaspora pension fund as a likely instrument for the financing of the continent's development infrastructure. The case study further sought to test, using chi-square and logistic regression, whether the independent variables of age, gender and education have an effect on the willingness/support of the members of the diaspora in the establishment of the diaspora pension fund for the financing of the continent's infrastructure. The results show that members of the sampled diaspora community support the modeling and also showed their willingness to be part of the diaspora pension fund and to have part of their pension contributions invested for the financing of the development infrastructure. The resulting model shows that males, who are middle-aged and well-educated, are more likely to be in support of the modeling of the diaspora pension fund as a likely instrument for financing the continent's development infrastructure. The results show that when modeling the diaspora pension fund factors such as age, education, gender, remaining years towards retirement, governance, corruption, regulatory issues, and the rule of law and the infrastructure of investment portfolio diversification have to be taken into account as they affect the likelihood of support amongst the diaspora community. The research will help policy makers, global pension funds, governments in Africa, and the bigger community of the Africa diaspora in assessing the feasibility of commercialising the diaspora pension fund as an innovative financing instrument.
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    The risk appetite of development finance institutions (DFIs) and funding for start-ups in South Africa
    (2017) Nkosi, Thabiso; Biekpe, Nicholas; Motelle, Sephooko Ignatius
    Using publicly available data from three South African Development Finance Institutions (DFI's), this study examines the risk appetite of Business Partners (BP), the National Empowerment Fund (NEF) and the Small Enterprise Finance Agency (SEFA). This study analyses data between 2011 and 2015 to determine the DFI's risk appetite and to identify key determinants of risk appetite with regard to funding SMEs, specifically startups. The study's findings reveal that South African DFI's have a high to extremely high-risk appetite level and that state-owned DFI's, NEF and SEFA have a higher risk appetite for funding SMEs specifically startup related loan products than private DFI BP. The study's findings also illustrates that South African DFI's risk appetites have a weaker negative relationship with shorter-term financial products than longer-term financial products indicating a higher risk appetite for funding shorter-term financial products.