The Impact of COVID-19 on the Congolese Financial System : An empirical Investigation

Abstract

The COVID-19 pass-through on the financial system moves at supersonic speed, undermining financial stability with a contraction of claims on the private sector, withdrawing deposits, and tightening the fiscal circumstances . The primary goal of this research is to investigate the unprecedented influenceof COVID-19 on the Congolese financial system. An autoregressive Vector Bayesian model is used to test the connection . The data utilized is a monthly series from December 2013 to October 2020. The results reveal that the COVID-19 pandemic has varying degrees of negative impact on the Congolese financial system. The Congolese government should immediately ado pt macroeconomic and financial policies by boosting and injecting liquidity into the banking sector to mitigate the negative consequences. At the same time, the expansion of Fintechs on the one hand and the expansion of cyberattacks on the other would enhance the financial system landscape . To maximize the digitization of the financial systems and enhance the effectiveness of cybersecurity, financial institutions should implement intelligent policies and invest in research. This study is the first to be done in Congo to the authors' best knowledge and serves as a battery for further research in Africa and the world.