Dynamics and Macroeconomic Determinants of Domestic Bank Credit to the Private Sector in Mali: An Empirical Evidence

Abstract

This study analyses the dynamics and macroeconomic determinants of domestic bank credit provided to the private sector in Mali over the period 1982-2024. Although these determinants have been widely documented in other contexts, no empirical work has been specifically devoted to the Malian case, a gap this research seeks to fill. Drawing on an autoregressive distributed lag (ARDL) model, the bounds cointegration test confirms the existence of a stable long-run relationship (F = 5,95) between credit and its determinants, namely the money supply, the growth rate of the consumer price index used as a measure of inflation, trade openness and economic growth. The results reveal the predominant role of monetary conditions, with the money supply exerting a positive and more than proportional effect on credit, with an elasticity of 1,17, while inflation significantly curbs it. The error correction term, estimated at -0.41, reflects a gradual convergence towards long-run equilibrium. In terms of implications, these results highlight that supporting the financing of the private sector depends above all on prudent liquidity management and on keeping inflation under control. Assessed in light of a limited sample and a period marked by major political and security shocks in Mali, these results call for the inclusion, in future research, of institutional and security-related variables.

Classification JEL : : E51 ; E31 ; G21 ; O55.

Paper type : Empirical research.