Accounting and Finance Dissertation

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An Assessment on Credit Management Practices of Commercial Banks in Ethiopia: /The Case of Six Selected Private Commercial Banks/
(AAU, 2024-03-13) Kahsu Hluf; Abebaw Kassie (PhD)
Now days, the need to take credit to do a business is getting increased. This is so because entrepreneurs and business men have good business ideas but do not have initial capital to make their business in to practice. Whenever lenders (banks) decide to grant a credit, they need to have credit management and method of collecting it. This research work, therefore, dealt with the `Credit Management practices’ of selected commercial banks. The general objective is, then, to assess the banks` credit management practices and method of collections by taking 2023 as a reference year. The research design of this paper work is descriptive. The sampling technique that the researcher used is that of non-probability using convenience and purposive sampling. Both qualitative and quantitative approaches were used. The data gathered from the field and document analysis were tabulated, organized and systematically demonstrated in the form of tables and graphs. The major research findings of this research work revealed that the overall mean score value of credit appraisal variable was very satisfactory that is most respondents strongly agree to the existing credit appraisal. Besides, the overall mean score value related to the variable collection policy andits strategy was satisfactory that is most respondents agree to the existing credit collection policy. Further, the overall mean score value of the variable credit lending policy and related strategies showed average level of satisfaction. The criteria to get a credit need to have either buildings or vehicles, with which the lower society could not afford. Thus, the researcher recommends original educational documents to be considered as collateral to get a loan. This piece of work could also open a way for further research works treating the topic in a very wide way by considering the views of credit customers.
Assessment of Financial Management of Urban Local Governments of Addis Ababa, Ethiopia
(AAU, 2018-01-08) Milen Amare; Abebaw Kassie (PhD)
Municipal Financial management particularly the aspect of municipal revenue collection and financing of municipal functions are important areas of concern in Addis Ababa. Addis Ababa city administration is facing with an ever increasing demand for municipal services and this challenge will continue in so far as the city continues to expand. This issue is directly linked to the ability of the city administration in generating adequate and increasing revenue and in its ability to efficiently utilize the available resources. The revenue enhancement plan of the city shows that despite the untapped potential, the city couldn’t collect adequate own revenue that can enable it serve residents of existing and new expansion areas. This study therefore, makes an effort to explore whether expenditures for municipal functions is financed by own revenue; if there are revenue lines that conflicts to each other or with that of state revenues; the cities experience in terms of budget predictability and to look in to the contributing factors towards revenue collection performance. Secondary data (plan and actual data for revenue and expenditure) were used to make analysis of revenue performance over time and to assess utilization capability of the city. Semi structured interview with officials of revenue bureau and BoFED were carried out to collaborate the findings from the secondary data. In addition 60 respondents were purposively targeted from among residents of two subjectively selected woredas to answer a research question. Distribution tables, charts, percentages and examination of bases and timing of municipal revenue levies followed a descriptions and inferences were employed to analyze data and information. The study has discovered that due to shortage in municipal revenue collections, municipal functions are partly financed by state revenue. Budget predictability problem is more on municipal revenue than state revenue and underutilization of budget is commonly observed over the study years. Through the findings of the study, residents aware of municipal revenues and do not have objection to the laws governing such revenues, rather they feel that they are morally obliged to pay their share. However they believe that there is discrimination among tax payers and claim that even for similar businesses the amount of tax and municipal charges is not uniform. Nepotism and corruption are figured out at the top cause for such discrimination
Assessment of Internal Audit Practice in the Cases of Ethiopian Airlines Group
(A.A.U, 2022-03-22) Henok Balew; Abebaw Kassie (PhD)
Internal audit maintains for a business enterprise in the global business environment that can ensure the safeguarding of the enterprise's assets. Aside from the previously conducted research, this paper would examine the internal auditing practices of Ethiopian Airlines group. The overall goal of this study was to evaluate internal audit practices in the airline industry using Ethiopian Airlines as an example. Specific objectives of this study were to evaluate the overall structure of the internal audit system, the obstacles that the internal audit encountered, the autonomy of the internal audit from management, and the actual practice's compliance with standards of the organization. This study used a descriptive research method with a judgmental or purposive sampling technique. The target population for the study was employees of Ethiopian Airlines located at Head Office, Internal audit division. The sample size for this study was 50 from all employees in the internal audit department and 92% of the target sample was attained through questionnaires sent. The analysis shows that there is strong internal audit structure and adequacy across the company and there is independence of the audit section from the company line structure. This audit report also revealed that there is no freedom of auditors to disclose any audit findings without prior approval of the management. Finally, a conclusion and recommendation have been made based on the study`s findings.
Assessment of Risk Management Practice of Dashen Bank
(A.A.U, 2023-06-23) Hilina Girma; Abebaw Kassie (PhD)
The aim of this paper is to analyze the effectiveness of risk management practice of dashen banks. Information was obtained from Dashen Bank risk management department staff by adopting quantitative method in a research design. Open and closed-ended questionnaires were administered to 100 respondents from risk management department. The questionnaires covered key aspects of risk management including the importance of risk management practice, risk identification, risk monitoring and nature of risk management practices. After the questionnaires were completed, the answers were analyzed using statistical processing software, SPSS . The main findings of this paper are: risk managers perceive risk management as critical to their banks performance; the types of risks causing the greatest exposures are credit risk, market risk, liquidity risk, interest rate risk and money laundry risk; and, banks are utilizing some of the approaches/techniques traditionally used to manage risks. Some recommendations were made and prominent amongst them were that Dashen Bank should give emphasis in staff training of the area of type of risk, identification of risk and management and they must make risk visible, measurable and manageable and ensure a meaningful risk culture throughout all processes and activities. Key words: Dashen Banks, Risk Management, and Risk Management Practices
Challenges and Prospects of Full-Fledged Islamic Banking Operations in Ethiopia
(A.A.U, 2024-02-22) Yonas Mulugeta; Abebaw Kassie (PhD)
This research aims to examine the challenges and prospects of full-fledged Islamic banking operations in Ethiopia. To realize this objective descriptive research design was used Primary data is collected through a structured interviewing of purposely selected key informants including the banks’ management group, board members, shareholders and customers. Moreover, questionnaire on a form of both close–ended and open ended questions are used for the bank’s employees. Secondary data are journal articles, various post graduate studies, banks report and internal document, and web particularly Google scholar. The researcher apply a mixed (both qualitative and quantitative) research approaches. The data was analyzing via descriptive occurrence, statistics of mean and standard deviation using SPSS version 25 Software. The result shows that Islamic banking service has a potential to attract investors, have contribution to support and expand local businesses, creates employment opportunities and the service represents additional deposit to the banks. by way of, the communication imply that skilled concede possibility be vital public explanation programmers to build more consideration and to remove argument and changeableness between Muslim and non-Muslim; Shareholders, board of managers and the administration of the bank endure recognize the idea and be helpful accompanying interest free banking as a consequence, the following pieces of advice were forward apiece analyst established the results of the influence association accompanying research impression: create awareness by using the marketing tools, training employees about principles and practice of Islamic banking operations, create awareness in non Muslim societies service is based on non interest, not on religion. Key words: Full-fledged Islamic banking, Islamic Finance, Operational challenges of IFB, Prospects of IFB
Determinants of Insurance Companies Profitability: The Case of Ethiopian Insurance Industry
(AAU, 2024-03-09) Geleta Haso Bame; Abebaw Kassie (PhD)
The development of social and financial stability, the growth of commerce and industry, and economic progress all depend critically on the presence and survival of powerful insurance companies. For several years, academics connected to the finance literature have been interested in profitability. But in the context of Ethiopia, the insurance industry received little attention. In order to determine the factors that affects the insurance businesses' profitability in Ethiopia, this study looks into the industry-specific, macroeconomic, and company-specific factors that were taken into account in the regression model. The study used secondary panel data covering the period 2018-2022 and out of the 18 insurance companies operating in the country, a sample of 17 insurers were selected by non-probability purposive sampling technique. To identify the relationship between the ROA and independent factors, a quantitative research technique and an explanatory way of research design were employed. Descriptive statistics, correlation analysis and fixed effect regression analysis were performed using the statistical software "Stata 14.2." to analyze profitability of the insurance companies in Ethiopia. Fixed Effect model regression results, suggest that industry-specific variables like market share and firm-specific variables like loss ratio, investment income ratio, and business age are significantly affects the profitability. The results also showed a positive correlation between market share, inflation, premium growth, reinsurance dependency, GDP growth, and investment income and profitability. The loss ratio, leverage, and age of the company were found to be negatively correlated with ROE. Ultimately, in order to keep their business profitable, managers should place a greater focus on investment opportunities, potential client, customer happiness, and pre-risk evaluation and selection, and claim handling.
Determinants of Lease Financing Propensity by Manufacturing Small and Medium Enterprises: Evidence From Ethiopia
(AAU, 2022-06-15) Alemu Ayalew; Abebaw Kassie (PhD)
By using descriptive and explanatory research design and mixed approach, this study tried to identify and investigate the main determinant factors that affect propensity of lease financing by manufacturing small and medium enterprises in Ethiopia. Self-administered questionnaire were used to collect primary data and the secondary data was collected through reviewing proclamation, procedures, journals and various important literatures. The target population for this study was 1797 manufacturing small and medium sized enterprises located in Addis Ababa city administration. The sample size was determined by using the method appraised by Carvalho (1984) and a sample of 200 manufacturing SMEs was selected from Addis Ababa city administration using stratified proportional random sampling technique. The study were devised logistic regression model, where use of lease financing was regressed against enterprise related factors, institutional framework factors and leasing information and knowledge variable factors using STATA V14. The data collected was described using tables, bar charts, frequencies and percentages line with the objectives of the study. The variables selected were identified using stepwise regression method and presented as a final model using for analysis. The study revealed firm size, firm’s age, growth opportunity and leasing information, knowledge and awareness have positive and significant factors. In contrast availability of loan, collateral and institutional framework factors are negative and significant impact that determine the lease financing propensity of manufacturing SMEs.as recommendation, the government should, intuitively appreciate and assist leasing systems as well as SMEs to freely engaged on lease financing system for development of it in the country by formulating attractive tax schemes and simple regulations
Factors Affecting Customer Satisfaction in Interest-Free Banking Services Offered by Private Banks: a Case Study of Dashen Bank in Ethiopia
(AAU, 2024-03-11) Alemu Fithanegest; Abebaw Kassie (PhD)
This study aims to examine the factors that influence customer satisfaction with interest-free banking (IFB) services offered by private banks in Ethiopia, with a specific focus on Dashen Bank. The study employed a quantitative research design and collected data through a survey questionnaire administered to Dashen Bank customers who have utilized IFB products and services. The study utilized both primary and secondary data, with the questionnaire designed to gather relevant information.The findings revealed that all respondents (100%) reported being knowledgeable about Wadiah Amanah, Mudarabah Saving Account, and Qard. For Financing (Loan) Products, the majority (90.2%) indicated being knowledgeable, while a smaller proportion (9.8%) reported not being knowledgeable about this product. The correlation analysis reveals strong positive associations between respondents' attitudes, perceptions, service quality, trust, and effective communication with their overall satisfaction. The multiple linear regression model indicated that approximately 65.8% of the variance in the dependent variable is explained by the independent variables (R2=0. 658). The ANOVA results demonstrate that the regression model is statistically significant, as indicated by a highly significant F- statistic (F = 58.733, p < 0.001). Age exhibited a negative and statistically significant relationship with satisfaction (β = -0.078, p = 0.014), indicating that as Age increases, satisfaction decreases (β = 0.026, p = 0.407). Sex and occupation status, income and education level did not show statistically significant effects on satisfaction (β = 0.033, p = 0.341, β = -0.007, p = 0.822, and β = 0.057, p = 0.107) respectively
The Effect of Corporate Governance on Financial Performance of Insurance Companies in Ethiopia
(AAU, 2025-02-27) Jemal Ahmed; Abebaw Kassie (PhD)
Corporate governance refers to the system of rules, practise and processes by which a company is directed and controlled. It essentially involves the balancing of many interests. The objective of this study was to examine the connection between company governance instruments and the financial performance of Ethiopian insurers. Out of the entire of eighteen insurers which are functioning within Ethiopia, eight insurers were selected using purposive sampling. The study employed return on assets as a dependent variable including the size of the board, the frequency of board meetings, gender diversity in the board of directors, experience of the board of directors in the sector, their educational qualifications and the size of the audit committee are considered as independent variables. To attain stated objectives of the explanatory type and descriptive of research design with a mixed method employed. The primary data was gathered via designed surveys by using questionnaires tool filled by the executives as they were aware of the governance system in corporations. The secondary data was gathered from the National Bank of Ethiopia's annual performance Report. The study employed a panel data analysis procedure in drawing inferences. The results display that the size of the board, gender diversity in the board of directors and the size of the audit committee had significant and negative influences on the financial performance of Ethiopian insurers. Conversely, the frequency of board meetings, the prior exposure to the insurance sub-sector and the qualifications of board members regarding educational status had a significant and positive effect on Ethiopian insurers.
The Effect of Working Capital Management on the Profitability Textile Manufacturing Share Companies in Ethiopia
(A.A.U, 2023-06-02) Biruktawit Berihu; Abebaw Kassie (PhD)
The management of a company's current assets and liabilities is known as working capital management. Having an adequate amount of working capital can assist firms in maximizing their profits. The aim of this research was to examine how managing working capital affects the profitability of textile manufacturing companies in Ethiopia. The study used a quantitative research approach and analyzed secondary data collected from six manufacturing share companies' financial statements. The data was collected from a population of 66 observations covering an 11-year period (2011-2021) without applying any sampling technique. By employing SPSS and STATA statistical software, the panel data was quantitatively examined using fixed effect model estimation method. Major working capital management components, that are identified throughout this empirical study, such as account receivable period, cash conversion cycle and inventory conversion period shows, a statistically significant negative relationship with profitability, according to the findings. It suggests that, in order to optimize profit and raise the firm's worth, company management must keep the cash conversion cycle and other components of working capital at their optimal levels. On the other hand, the study has found that account payable period had shown statistically significant positive effect on the profitability of textile manufacturing companies thru return on asset. Additionally, the study has discovered that current ratio, has a considerable negative link with profitability, but sales growth has a strong positive relationship with profitability. In contrast to the previous findings, the researcher disclosed that a statistically insignificant positive association between the share companies’ debt and profitability.

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