Abstract:

This paper examines the impact of lending rate and bank competitiveness in driving entrepreneurship development in forty-two African economies, using multivariate dynamic regression techniques. The result reveals that the exogenous variables comply with a priori expectations, as lending rate positively drives cost to start business, while bank competitiveness reduces business start-up cost. The study recommends reduction in base monetary rates to single digit; advocates fiscal incentives for development finance institutions to finance entrepreneurship, promote competitiveness through technological banking, and licensing of new banks.