Development of the Commercial Banking System in Afghanistan : Risks and Rewards

WPIEA2009150 Image
Price:  $18.00

Author/Editor: Joshua Charap, Jelena Pavlovic
Release Date: © July, 2009
ISBN : 978-1-45187-297-2
Stock #: WPIEA2009150
Stock Status: On back-order

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Lending practices of commercial banks in Afghanistan were analyzed using CAMEL ratings. Statistically significant correlations were found: Banks with worse ratings (a) had more lending to domestic clients and (b) paid less tax. There was no statistically significant relationship between profits and total assets or between lending/assets versus profit/assets. Interviews of senior management of 8 banks accounting for about 90 percent of the commercial banking system corroborated evidence that poorly rated banks lend to domestic clients, whereas highly rated banks do not lend. Banks that lend extensively domestically engage in extra-judicial, non-traditional contract enforcement.


Banks and banking , Financial institutions and markets , Loans

More publications in this series: Working Papers

More publications by: Joshua Charap ; Jelena Pavlovic