Investigating the impact of foreign bank presence on local banks and banking innovation in Ghana
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Abstract
Over the past ten years, the number of foreign banks in Ghana seems to be
increasing at a very fast pace and it appears this will not slow down anytime
soon. The purpose of this study is to investigate the effect of foreign bank
presence on local banks and banking innovation.
The study was exploratory in nature and employed primary data to draw its
conclusions. Purposive sampling methods such as expert sampling and
snowballing were used to identify the participants of the research. The
participants were engaged in semi – structured interviews and qualitative
content analysis was used to analyze the data.
The results suggest that domestic banks are being positively and negatively
affected by foreign bank presence. On one hand, local banks were reaping
the benefits of implementing new technologies and processes that foreign
banks introduced when they entered the country. However, because of the
advanced technologies that were used by foreign banks as well as their easier
access to capital, they have created serious competition for the local banks.
As a result, most local banks are losing their market share and even in some
cases, they have closed down because they cannot keep up with the
competition.