The expansion of Moroccan banks in Africa: The motives and the impact on Performance

Abstract

Moroccan banks have witnessed rapid growth since the early 2000s in the African continent, particularly in French-speaking countries where they have established themselves as important institutions in the financial sector. The purpose of this paper is to study, on the one hand, the motives for Moroccan banks’ expansion in Africa, and on the other hand, the impact of this expansion on their performance.

To respond to research questions, a three-step process was followed. First, we propose and operationalize an explanatory model. Second, we collect secondary data to conduct a longitudinal analysis over the study period. Third, we mobilize a multiple linear regression to test the hypotheses.

Three conclusions emerge from the study. First, the absence of growth opportunities on the national market and the possession of a specific advantage positively impacts the development of Moroccan banks in Africa. Second, the development of domestic customers in Africa has a positive impact on the development of Moroccan banks on the continent. Third, the internationalisation of Moroccan banks does not have a significant impact on the performance of banks (Profitability and risk).

Admittedly, this study has limitations. The first is the non-use of retrospective interviews. The second is related to the accounting and financial data period. We have retained 11 years instead of the 18 years originally planned. The third is the absence of data related, on the one hand, to the evolution of the number and geographical distribution of bank branches at the level of each country and, on the other hand, to the trademark (Brand) used at the level of each country.

Keywords: Strategy; Internationalisation; Performance; Bank; Africa.

Classification JEL: F23, G21, M16

Paper type: Empirical Research