Analysing determinant of deposit mobilization in Ethiopia
Deffersha, Aberham (2023)
Deffersha, Aberham
2023
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2023121336785
https://urn.fi/URN:NBN:fi:amk-2023121336785
Tiivistelmä
The oversight of this project falls under Tsehay Bank SC, established on July 23, 2022. Given the novelty of the bank in the industry, the primary goal of this study was to examine the factors impacting deposit mobilization in Ethiopia and their ramifications for banks aspiring to establish a competitive position in the financial sector. The outcomes of this research would guide the overseeing commissioner company in formulating an efficient deposit mobilization strategy.
In this thesis, quantitative research methodologies were applied to analyze both primary and secondary data sources. Descriptive analysis, specifically employing a frequency measure, was utilized to draw conclusions about data distribution. Additionally, the thesis employed ordinary least square regression analysis to explore the relationship between dependent and independent variables, providing insights into the extent of this relationship.
The study identified nine explanatory variables influencing the mobilization of deposits by banks. Secondary data for these variables were collected from financial statements of private commercial banks, the National Bank of Ethiopia, the Central Statistical Authority, and other pertinent sources. Additionally, primary data were gathered through questionnaires as part of a survey conducted in a specific geographic area and banks, covering the period from 2015/16 to 2021/22.
Regression analysis revealed that banks' return on assets (profitability) has a positive and significant effect on deposit mobilization in Ethiopia. Deposit interest rate, branch expansion, customer relationship management, GDP growth rate, and population growth rate all have a positive and insignificant effect on bank deposit mobilization in Ethiopia. Loan to deposit ratio, inflation rate, and conflict and political instability have a negative and significant impact on deposit mobilization of banks in Ethiopia. In general, four of the nine findings from microeconomic variables and macroeconomic variables have a significant impact on the deposit mobilization of banks in Ethiopia.
In this thesis, quantitative research methodologies were applied to analyze both primary and secondary data sources. Descriptive analysis, specifically employing a frequency measure, was utilized to draw conclusions about data distribution. Additionally, the thesis employed ordinary least square regression analysis to explore the relationship between dependent and independent variables, providing insights into the extent of this relationship.
The study identified nine explanatory variables influencing the mobilization of deposits by banks. Secondary data for these variables were collected from financial statements of private commercial banks, the National Bank of Ethiopia, the Central Statistical Authority, and other pertinent sources. Additionally, primary data were gathered through questionnaires as part of a survey conducted in a specific geographic area and banks, covering the period from 2015/16 to 2021/22.
Regression analysis revealed that banks' return on assets (profitability) has a positive and significant effect on deposit mobilization in Ethiopia. Deposit interest rate, branch expansion, customer relationship management, GDP growth rate, and population growth rate all have a positive and insignificant effect on bank deposit mobilization in Ethiopia. Loan to deposit ratio, inflation rate, and conflict and political instability have a negative and significant impact on deposit mobilization of banks in Ethiopia. In general, four of the nine findings from microeconomic variables and macroeconomic variables have a significant impact on the deposit mobilization of banks in Ethiopia.