By Yao Dossa Tadenyo

Summary:

This study and research paper is intended as a contribution to the literature on the relationship between bank liquidity and bank loan growth based on the experience of the WAEMU countries. Dr. Tadenyo's study also contributes to a better understanding of the factors affecting bank lending behavior in the community, particularly through liquidity injections by the Central Bank.

The paper was based on an estimated model of bank loan growth using quarterly data from an unbalanced panel of 94 banks over the 2010-2019 period.

Its findings suggest, inter alia, that bank loan growth is determined by specific bank characteristics, including size, liquidity, bank risk, and loan portfolio quality. They found a significant influence of capital on bank credit growth, due to interactions between capital and bank liquidity. Macroeconomic factors such as growth and inflation also played a significant role in the dynamics of bank loan supply in the Union.

The study sheds additional light on the determining factors of bank loan growth in WAEMU and its interactions with the financing of the economy.