ABSTRACT
The objective of this study is to explore the main determinants of interest rate spread in
Namibia's commercial banking industry using a panel data analysis of bank level data
and time series analysis of macroeconomic data. The literature surveyed in this study
suggests that the interest rate spread is influenced by several bank-specific, bankindustry,
and macroeconomic variables. The data for the bank-specific model covered
a sample period from the first quarter of 2004 to the last quarter of 2011 whilst the
macroeconomic model included a sample period from the first quarter of 1991 to the
third quarter of 2011 . The unit root and cointegration analysis were applied in order to
model the interest rate spread.
The results at the bank level suggest that the deposit market share reduces the net
interest margin whilst the liquidity levels of a commercial bank increases the net
interest margin. Furthermore, it was found that the tax paid by a bank and the capital
ratio are not important determinants of the net interest margin. The results at the
macroeconomic level implies, that the treasury bills rate reduces the interest rate spread
whilst, inflation rate; exchange rate and the bank rate increases the interest rate spread.
Thus, the contractionary monetary policy has an effect of increasing the interest rate
spread and the expansionary fiscal policy has a negative influence on the interest rate
spread.
SAMAHIYA, M (2021). The Determinants Of Commercial Banks' Interest Rate Spread In Namibia: An Econometric Exploration. Afribary. Retrieved from https://track.afribary.com/works/the-determinants-of-commercial-banks-interest-rate-spread-in-namibia-an-econometric-exploration
SAMAHIYA, MUINE "The Determinants Of Commercial Banks' Interest Rate Spread In Namibia: An Econometric Exploration" Afribary. Afribary, 28 Apr. 2021, https://track.afribary.com/works/the-determinants-of-commercial-banks-interest-rate-spread-in-namibia-an-econometric-exploration. Accessed 25 Nov. 2024.
SAMAHIYA, MUINE . "The Determinants Of Commercial Banks' Interest Rate Spread In Namibia: An Econometric Exploration". Afribary, Afribary, 28 Apr. 2021. Web. 25 Nov. 2024. < https://track.afribary.com/works/the-determinants-of-commercial-banks-interest-rate-spread-in-namibia-an-econometric-exploration >.
SAMAHIYA, MUINE . "The Determinants Of Commercial Banks' Interest Rate Spread In Namibia: An Econometric Exploration" Afribary (2021). Accessed November 25, 2024. https://track.afribary.com/works/the-determinants-of-commercial-banks-interest-rate-spread-in-namibia-an-econometric-exploration