The Impact of Corruption on Bank Credit Risk in selected Sub-Saharan Africa

Abstract

Corruption is one of societies' core ailments, impacting banks' performance. Corruption may impact lending practices and borrowers’ willingness to repay loans, impacting banks' credit risks. We examine the impact of corruption on banks' credit risks in Sub-Saharan Africa. We use panel data from 10 sub-Saharan African countries from 2012 to 2023. We apply panel data analysis to examine the impact of a battery of control variables on banks' credit risks. Our analysis confirms that control of corruption significantly reduces banks' credit risks. Our results have implications for policymakers who aim to reduce banking risks.