This paper investigates the effects of foreign banks existence on performance of the banking sector and financial development in Tanzanian during the period 2000 -2016. We hypothesize that foreign banks have had a positive influence on the performance of domestic banks as measured by income and cost indicators.
Further, study findings suggest that increased foreign banks entry is associated with increased financial inclusion since financial liberalization increases as foreign banks set up branches and domestic banks became foreign owned. The econometric results show that foreign bank entry is associated with higher financial inclusion and improved domestic banking sector performance and overall financial development.
Tanzania, Banks, Financial Development
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