Information inefficiencies in the credit market of emerging economies in Sub-Saharan Africa has spark up adverse selection and moral hazard behaviour among market players which have affected the decisions in the financial sector and credit creation function. The study examines the dynamic interaction between credit information about borrower and credit creation function of lenders in Sub-Saharan Africa (SSA) countries. Using annual data from 2005 to 2022 from 36 SSA economies, the augmented mean group (AMG) and common correlated effect mean group (CCEM) was used to estimate the econometric research model while system GMM dynamic panel estimator was utlised for robustness purposes. The results indicate that provision of credit to the domestic private sector increases with coverage of credit information among SSA countries. Both public credit registry coverage and private credit bureau coverage significantly increases the provision of private credit. It was concluded that information sharing office (ISO) solves the information asymmetry problem between lenders and borrowers which significantly increases access to private credit. The outcome of the study suggests the need for Governments in SSA countries to offer support to ISOs by resourcing them to increase their information coverage and enable lenders to better screen their borrowers to make informed lending decisions.

Keywords: Information asymmetry, Moral hazard, Adverse selection, Credit creation