Contents -- Foreword -- Acknowledgments -- Abbreviations -- 1 Setting the Scene -- Introduction: The Role of the Financial Sector -- Key Policy Issues -- Modernism and Activism: Two Perspectives for Reform -- Ultimate Goals: Financial Sector Development for Growth and Poverty Reduction -- Policy Perspectives for the Major Elements of the Formal Financial Sector -- Reaching Difficult Markets -- Organization of the Report -- 2 African Financial Systems: Depth, Breadth, and Efficiency -- Introduction: International Comparisons -- Financial Depth and Efficiency: What Explains Africa's Low Score? -- Nonbank Finance -- Inclusive Household Finance -- Enterprises Place High Value on Better Financial Services -- 3 Finance for Long-Term Growth: Enriching the Flow of Finance to Transform the Economy -- Introduction: Mainstream Financial Institutions -- Improving the Banking System's Ability to Intermediate Funds -- Ownership and Industrial Structure of the Banking System -- Term Finance and Risk Finance: Beyond Commercial Banking -- Macroeconomic Aspects: Building Confidence and Absorptive Capacity -- 4 Finance for All -- Introduction: Access to Formal Financial Services -- Technology and Financial Engineering -- Organization: Who Needs to Do What? -- 5 Policy Choices in Current Conditions -- Introduction: The Vision -- From Vision to Policy -- Where Should Government Begin? Two Attainable Goals -- Contrasting Initial Conditions -- Appendix: African Relationship Lending -- Credit Appraisal -- Enforcement -- Bibliography -- Index -- Boxes -- 1.1 Stability, Certainty, and Transparency: Foundations of Financial Sector Efficiency -- 1.2 Microfinance: Sustainability and Outreach -- 2.1 Historic Explanations of Cross-Country Variation in Financial Development -- 3.1 Dollarization -- 3.2 Points to Look For in an Effective Legal System.

3.3 Bank Regulation: Avoid Reliance on Extensive Discretionary Powers -- 3.4 Basel II in Africa -- 3.5 Foreign Banks and SME Lending: Evidence from Cross-Country Studies -- 3.6 One Country's Experience with State-Owned DFIs -- 3.7 Governance Arrangements for DFIs -- 3.8 Surges in External Inflows and Implications for Financial Stability -- 4.1 Ignoring Informal Finance? -- 4.2 Pilot Weather-Based Insurance in Malawi -- 4.3 Price Risk Insurance in Tanzania -- 4.4 Improving the Remittances Situation -- A.1 Reputation -- Figures -- 1.1 Gross Domestic Product (GDP) Growth Rates and Financial Depth, 1980-2003 -- 2.1 Liquid Liabilities across Countries -- 2.2 Private Credit across Countries -- 2.3 Private Credit and GDP per Capita -- 2.4 Liquid Liabilities to GDP and GDP per Capita -- 2.5 Private Credit to GDP and GDP per Capita -- 2.6 Offshore to Domestic Bank Deposits: Regional Distributions -- 2.7 Asset Composition of Banks across Regions -- 2.8 Financial Depth in Africa, 1990-2005 -- 2.9 Real Interest Rates in Africa, 1990-2005 -- 2.10 Net Interest Margins across Regions -- 2.11 Governance across Countries -- 2.12 Size of Banking Systems across Countries -- 2.13 Private Credit: French and English Legal Origin -- 2.14 Financial Development and Initial Colonial Conditions -- 2.15 African Stock Exchanges: Capitalization and Value Traded as a Percentage of GDP -- 2.16 International Comparison of Stock Exchange Development: Main African Exchanges Relative to Other Developing Countries -- 2.17 Access to Finance, Regional Extremes, Medians, and Means -- 2.18 Access to Finance across Countries -- 2.19 Financing Obstacles across Regions -- 2.20 Sources of Financing for Investment across Regions -- 2.21 Share of Agriculture across Countries -- 2.22 Share of Informal Economic Activities across Countries -- 3.1 Liquidity of the Banking System in African Economies.

3.2 African Banks: Financial Depth and Liquidity, 2004 -- 3.3 Business Opinion on Courts and on the Recoverability of Overdue Amounts -- 3.4 Patterns of Bank Ownership: Africa and the Rest of the World -- 3.5 African Countries: Saving and Investment as a Percentage of GDP -- 4.1 Share of Cooperatives, NGOs, Savings, and Other Banks in Providing Access -- Maps -- 2.1 Financial Depth: Average Ratio of Private Credit to GDP, 2000-04 -- 2.2 Predominant Form of Bank Ownership -- 2.3 Common Law and Civil Code Countries -- 2.4 Access to Finance by Households -- Tables -- 2.1 Bank Profit Comparisons, 2000-04 -- 2.2 Net Interest Margins and Overhead Costs in International Comparison -- 2.3 Distribution of African Countries by Predominant Form of Bank Ownership -- 2.4 Stock Exchanges in Africa -- 2.5 Portfolio Composition of Selected Life Insurance and Pension Funds -- 2.6 Credit Demand and Constraints across African Enterprises -- 3.1 Cross-Border Banking in Africa: Locations of Branches or Subsidiaries of 26 International Banking Groups -- 4.1 Remittances: Top Sub-Saharan Recipients -- 4.2 Large Financial Intermediaries and Networks in Africa Ranked by Outreach.