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Title: Determinants of Deposit in Ethiopian Private Commercial Banks
???metadata.dc.contributor.*???: Sewale Abate (Dr.)
Dereje, Hailemariam
Keywords: Bank deposit;Private commercial Banks;Regression Analysis
Issue Date: Feb-2017
Publisher: A.A.U
Abstract: Understanding the nature of national savings behavior is critical in designing policies to promote savings and investment which in turn enhance economic growth through capital formation. This paper empirically examines the determinants of savings in private commercial banks of Ethiopia for the 2001-2015 periods. From total of sixteen private Banks which are engaged in commercial activities, six selected based on the historical time formation of banks. The conceptual framework for this study is originally derived from Life-Cycle model and appropriately modified to accommodate the peculiarities of a developing country and builds on the existing cross-country literature on determinant of saving mobilization. The researcher adopted Quantitative research approach. Bank specific and macroeconomic variables were analyzed by using the balanced panel fixed effect regression model. Different diagnostic tests (test for assumption of Homoscedasticity, Autocorrelation, Normality, average value of the error is zero and independent variables are non-stochastic) were conducted to check the appropriateness of the model. The results reveal that disposable income, real GDP growth, branch expansion, are positively and statistically significant on bank deposit growth; whereas, loan to deposit ratio (bank’s liquidity)influence is negatively and statistically significant on bank deposit growth. Deposit rate and profitability had insignificant positive influence on bank deposit growth. Whereas population growth and capital to loan ratio (capital adequacy) had insignificant negative influence on bank deposit growth. The study implies that stimulation of economic growth is most important factors that affect bank deposit growth. The research recommends that private commercial banks should have to intensify branch expansion to areas where there are potential deposit sources even to remote locations .moreover, private commercial banks required to have enough liquid assets to meet the demand for cash outflows so as to generate and sustain public confidence of the depositors.
Description: Thesis Submitted In Partial Fulfillment of the Requirements for the Degree of Master of Science in Accounting and Finance
Appears in Collections:Thesis - Accounting & Finance

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