As expected, the indicators for productivity and capital adequacy have shown a positive relationship with ROA of financial institutions.2 The latter reflects that a well-capitalized financial sector is able to tap business opportunities more efficiently and have more flexibility in dealing with problems arising from adverse developments in the operating environment of the financial sector.
This also supports the ongoing policy of strengthening the capital base of financial institutions through raising paid-up capital requirement. 19. Second, banking sector reforms have not penetrated deep down or spread across population and regions. Vast majority of the population does not have access to financial services. Country is characterized by lowest savings rates and access to finance remains weak.