Investigating the impact of foreign bank presence on local banks and banking innovation in Ghana

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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.
Thesis submitted to the Department of Business Administration, Ashesi University College, in partial fulfillment of Bachelor of Science degree in Business Administration, April 2015
Ghana, banks, innovation, competition, regulation