The Contribution of Commercial banks to the growth of the banking sector in Liberia

This section briefly describes the commercial banks in the country and provides a general overview of the role of commercial banks in a country, thus setting out the context for the study. It review relevant literature and develops an analytical framework in order to assess whether or not the commercial banking sector in Liberia is making a difference.Delivering quality service to customers is a must for success and survival in today’s competitive banking environment (Samli and Frohlich, 1992). Today’s customers face a growing range of choices in the products and services they can buy. Most customers have difficulty understanding the complex nature of financial service products hence they most often focus on brand names and these brand names are built on quality service. Service quality issues have long been neglected in developing economies when compared to information available about developed economies like the USA and Europe (Firoz and Maghrabi, 1994) and this also applies to the banking industry (Angur, 1999). Ghana, being a developing economy and its banking sector with a wide geographical reach catering for the needs of quite a huge client, offers an excellent scope for research on the issue of quality in banking.

A substantial body of literature has been devoted to the link between finance and economic development in Banking System in Nigeria, both in developing and developed economies. Patrick (1966) postulates a bi-directional relationship between financial development and economic growth. Nigeria is the most populous African country with a population of about 140 million people. This represents about 20% of the population of the entire African continent. It is also one of the world’s top eight producers of crude oil in the world (Beck, 2005). Some four decades ago, Gerschenkron then an economic historian at Harvard published what would quickly become a classic on the mechanisms of growth among backward countries. Those that were more backward like Germany and Russia needed a different route. Rather than rely on decentralized market processes, they government (A. Gerschenkron, 1962). 

In an attempt to successfully carry out this research, considered the ideas of previous work; and talked to subject matter experts examining their opinion on issues of relevance to this study. This chapter also reviewed those literatures that are of assistance to this study. This section briefly describes the commercial banks operating in the country and provides a general overview of the role of commercial banks in a country, thus setting out context for the study. It reviews relevant literature and develops an analytical framework in order to assess whether or not the commercial banking sector in Liberia is making a difference.