Mauritania’s Banking System: Profits and Credit

Overview

This series examines why Mauritania’s banking system can report strong profits without equally strong financial intermediation. It separates earnings from access, depth, lending, liquidity, and concentration; explains how residual movements at dominant banks are weighted into aggregate credit; and compares lending with profitability shocks. In the 15-bank, June 2020–June 2024 post-COVID panel, size-weighted lending shocks closely track short-run aggregate credit, while profitability shocks add little same-month information. The evidence is a concentrated case diagnosis, not a universal causal or long-run claim.

Learning outcomes

High bank profitability does not establish broad access to credit or deeper financial intermediation.
In the study’s Mauritania sample, the five largest banks overwhelmingly drive aggregate credit.
Size-weighted lending residuals strongly track same-month aggregate credit, while equal-weight residuals do not.
Profitability shocks add little same-month credit information; longer-run conversion into lending remains untested.

Keywords

MauritaniabankingcreditlendingprofitabilityintermediationconcentrationEADGliquiditysupervision

Chapters

Mauritania’s Bank Profits Without More Lending

Why earnings can strengthen buffers without widening credit access

10 min · Why earnings can strengthen buffers without widening credit access

10 min

Mauritania’s EADG: Measuring Access and Depth

How pricing, liquidity, and concentration shape the diagnosis

8 min · How pricing, liquidity, and concentration shape the diagnosis

8 min

How Mauritania’s Bank Shocks Reach Credit

How residuals and lagged size shares preserve exposure

10 min · How residuals and lagged size shares preserve exposure

10 min

Measuring Mauritania’s Bank Shocks

What residual fit and diagnostics can—and cannot—show

11 min · What residual fit and diagnostics can—and cannot—show

11 min

Mauritania’s Lending Shocks and Aggregate Credit

How concentration changes short-run credit evidence

9 min · How concentration changes short-run credit evidence

9 min

Mauritania’s Profitability Shocks and Credit

Why buffers, risk, and timing can delay lending

11 min · Why buffers, risk, and timing can delay lending

11 min

What Mauritania’s Bank Profits Do—and Do Not—Show

Policy choices for transmission, resilience, and inclusion

13 min · Policy choices for transmission, resilience, and inclusion

13 min

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FAQ

What does the EADG gap mean in Mauritania’s banking system?

It means profitability-related efficiency is running ahead of access and depth; it flags a divergence, not proof that market power or unjustified rents caused it.

Why can Mauritania’s banks be profitable without deepening credit?

They can earn from spreads, fees, valuation effects, or risk compensation while retaining income for liquidity, provisions, capital, or existing risks instead of expanding lending.

How do dominant-bank lending shocks relate to aggregate credit in Mauritania?

Across eight specifications, size-weighted lending shocks were positive and significant, with coefficients of 0.634–0.923 and R-squared rising to 0.872–0.981; this is strong short-run association, not a universal causal multiplier.

Do profitability shocks predict aggregate credit in Mauritania?

Not strongly in the study’s same-month regressions: size-weighted profitability shocks had coefficients of 0.031–0.064 and added little fit. The result does not rule out delayed pass-through.

Can the Mauritania study prove that bank shocks cause credit growth?

No. Its short post-COVID panel and direct-predictor design show concentrated short-run association, while aggregation and unobserved demand or supply factors limit causal interpretation.