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| Topic: |
Business
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| Number of pages / Number of words: |
44 / 12291 |
Essay's paper body
This has the economywide
effect of reducing feasible investment opportunities and thus limiting
future growth potential. It has been observed that large spreads occur in
developing countries due to high operating costs, financial taxation or
repression, lack of a competitive financial/banking sector and
macroeconomic instability...
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That is, risks in the financial sector are high.
Financial reforms and liberalization should improve efficiency in the
intermediation process. This implies that the spread will decline over time
as liberalization is accomplished and the financial sector develops. But in
Kenya, financial liberalization seems to have led to a widening interest rate
spread...
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