Business Administration in Finance
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Item The Effect of Human Resource Management Practice on Organization Commitment, in Case of Lideta Sub City Administration Office(A.A.U, 2024-06-16) Debora Gebredingle; Dejene Tulu (PhD)Human resource management practices such as training & development, performance appraisal, compensation & reward, recruitment & selection and their effects on the organizational commitment are examined by previous researchers. However, not many studies have conducted in Ethiopia, more specifically in the government administrative office. This researches was aimed to investigate the effects of human resources management practices in organizational commitment based on the three-aspect version of organisational commitment, such as; affective commitment, continuance commitment, and normative commitment. Also the study was conducted in Ethiopian Lideta Sub City Administration Office and it uses explanatory to examine the relationship cause and effect among variables. The total of 232 questionnaires was disseminated and 205 were collected that accounts 88.4 % response rate. Data was collected and Statistical Package for Social Sciences (SPSS) version 20 was used as the statistical analysis tool and interpretation of findings. The research finding was indicated that affective, continuance, normative, and overall organizational commitments was high relationships with performance appraisal and compensation & reward and low relationships with training & development and also recruitments & selection. Generally, the study concluded that the overall HRM practices has been 70.3% influenced on the organizational commitment. Keywords: Organizational commitment, affective commitment, continuance commitment, normative commitment, training & development, performance appraisal, compensation & reward, recruitment & selection.Item Investigating the Role of Accounting Information Systems in Enhancing Financial Performance: The Case of the Ethiopian Insurance Industry(A.A.U, 2024-06-12) Mehari Tefera; Temesgen Worku (PhD)The Ethiopian insurance industry has made notable growth since the mid of ‘90s, highlighting the need for sound financial performance. This thesis investigated the role of accounting information systems (AIS) in enhancing these practices within the industry. Besides this, this research explored the current state of AIS adoption. It also examined existing challenges, and evaluates the perceived impact of AIS on general financial management areas. The study combined quantitative data analysis with qualitative insights gathered through interviews and survey questionnaire with 68 executive level insurance professionals by employing a mixed-method approach. Literature has it that effective AIS implementation can lead to improved accuracy, efficiency, and transparency in financial data. This improvements guarantees better financial performance. However, challenges such as system integration, user skill gaps, and inadequate data security could hamper full adoption of the information system. This thesis employs Resource Based View of Firm Theory, DeLone and McLean Information System Success Model, Technology-Organization-Environment, Technology Acceptance Model, and Profit Maximization Theory as a theoretical framework. The findings of the study rejected the alternative hypothesis while upholding the null hypothesis which states: there is no significant relationship between Accounting Information System and Financial management performance within the context of the Ethiopian Insurance Industry, at 0.05 significance level. Keywords: Financial Performance, Resource Based View of Firm Theory, DeLone and McLean Information System Success Model, Technology-Organization-Environment, Technology Acceptance Model, Profit Maximization TheoryItem Analyzing Financial Performance Trends of Commercial Banks in Ethiopia: Implications for Investor Engagement in the Emerging Capital Market(A.A.U, 2024-06-12) Setna Abayrom; Mesfin Fikre (PhD)This research paper examines the financial performance trends of commercial banks in Ethiopia and explores their implications for investor engagement in the emerging capital market. The study aims to address the following statement of the problem: Despite the growth and development of the Ethiopian banking sector, there is a lack of comprehensive analysis on the financial performance of commercial banks and its impact on investor engagement in the capital market. This knowledge gap hinders investors' ability to make informed decisions and hampers the overall growth and stability of the capital market. Therefore, this research seeks to fill this gap by conducting a detailed analysis of financial performance indicators of commercial banks in Ethiopia. The study focuses on analyzing key financial ratios related to profitability, liquidity, solvency, and risk of eight commercial banks in Ethiopia. The research design adopts a quantitative approach, utilizing data collection instruments and techniques to gather financial data from the banks' annual reports from 2013-2022. The findings reveal the performance of each bank in terms of profitability ratios, liquidity ratios, and solvency and risk ratios. The research provides valuable insights to investors, regulators, and stakeholders, enabling them to better understand the financial health of commercial banks and make informed investment decisions in the emerging capital market . The conclusions and recommendations drawn from this study contribute to enhancing the understanding of commercial banks' financial performance and their role in the emerging capital market, ultimately promoting economic growth and development in Ethiopia. Key words: Banks, Ethiopia, Financial performanceItem Factors Determining Life Insurance Premium the Case of Ethiopian Insurance Corporation (Eic)(A.A.U, 2024-10-19) Wondimagegn Mersha; Alem Hagos (PhD)Insurance pricing is a crucial aspect for insurance companies as it directly impacts their profitability. To maximize revenue, insurance firms need to stay updated on the factors influencing insurance pricing decisions. The primary objective of this study is to identify the factors that affect life insurance pricing within the life insurance sector, specifically focusing on Ethiopian Insurance Corporation in Addis Ababa, Ethiopia. The research targets both management and non-management employees of Ethiopian Insurance Corporation life insurance department, considering variables such as Demography, Claim settlement, Government regulation and Competition level as predictors of Life insurance pricing. This study employs an explanatory research design to explore the factors influencing life insurance pricing in the life insurance industry. The Data was collected through questionnaires from a census of 92 employees of Ethiopian Insurance Corporation’s life insurance department. The analysis utilized Pearson correlation and multiple regression techniques via SPSS 26.0 to assess the relationships between the independent variables and life insurance pricing. Findings indicate that all identified factors contribute to life insurance pricing; however, claim settlement has the most significant impact compared to demography, competition level and government regulation. Consequently, insurance companies should develop strategies to effectively address these factors to enhance the life insurance pricing strategy of the insurance sector. Keywords: Life insurance pricing, Demography, Claim settlement, Government regulation and Level of competition.Item Impact of Cost Fluctuation of Major Consruction Materials on The Project Cost in The Case of Ethiopian Roads Administration(AAU, 2024-12-19) Biruhehiwot Zerihun; Alem Hagos(PhD)The aim of this study was to ascertain the potential impact of large construction material pricing fluctuations on the projects of the Ethiopian Roads Administration (ERA). Both qualitative and quantitative data were collected using a descriptive and explanatory study technique. Primary data were collected using questionnaires and interview guideline, while secondary data were obtained from eight projects with five years of data (60 months) via contractor's payment certificates and progress reports. The respondents were Ethiopian Road Administration Engineers, Consultants, and Contractors working on the eight projects listed. Only 60 of the 70 questionnaires that were distributed for this study's study region were accurately filled out and returned, yielding an 86% response rate. While quantitative data was analysed using statistics analysis, which included computations of mean and percentage as well as inferential analysis (multivariate as well as basic regression and correlation processes), qualitative data was analysed using content analysis. In situations where the connections were clear-cut, simple linear regression was able to effectively illustrate the relationship between the two variables. Since the materials used in the road projects are in large quantity, a rise in fuel prices could have an impact on the overall cost of road construction projects due to higher equipment and material transportation expenses. In addition, bitumen prices have fluctuated over time, with higher figures showing up in certain projects. Additionally, there are variations in the quantity of work that is subject to price adjustments; the majority of ERA projects experience delays and necessitate extending deadlines. Contractors may file claims for price increases that exceed their expectations of the price adjustment if they are granted additional time to complete their projects. Ultimately, it was found that fuel, steel, cement, and bitumen all had positive and significant effects on project cost. According to the study's findings, although material costs have not risen consistently over time, they have usually done so to the degree that they can significantly affect the overall cost of road construction projects. Based on the data, this study came to the conclusion that bitumen, steel, cement, and fuel had a favourable and significant impact on project cost. This study suggests that planning, monitorItem Impact of Taxpayers‘ Perception of Fairness on Tax Compliance Attitude: Evidence From Categories A And B Taxpayers in Bahirdar(AAU, 2024-05-18) Desalegn Demis; Wollela A. (PhD)This study investigates the determinants of voluntary tax compliance attitudes among taxpayers in the context of the business profit tax system. Utilizing logistic regression analysis and in-depth interviews, the research examines the impact of fairness perceptions, demographic characteristics, and business status on compliance attitude. Findings reveal significant positive associations between exchange, inter-group, procedural, and retributive fairness perceptions with voluntary compliance attitudes. Moreover, individuals in managerial status and those with combined ownership and managerial responsibilities demonstrate higher compliance likelihoods. Education level emerges as a critical determinant, with higher education associated with increased compliance. Age also influences compliance positively. Notably, the study emphasizes the importance of fairness perceptions and demographic characteristics in shaping compliance behaviour. Recommendations are provided for policymakers and tax authorities to enhance compliance through targeted interventions and educational proItem Factors Determining Life Insurance Premium: The Case of Ethiopian Insurance Corporation (Eic)(A.A.U, 2024-09-18) Wondimagegn Mersha; Alem Hagos (PhD)Insurance pricing is a crucial aspect for insurance companies as it directly impacts their profitability. To maximize revenue, insurance firms need to stay updated on the factors influencing insurance pricing decisions. The primary objective of this study is to identify the factors that affect life insurance pricing within the life insurance sector, specifically focusing on Ethiopian Insurance Corporation in Addis Ababa, Ethiopia. The research targets both management and non-management employees of Ethiopian Insurance Corporation life insurance department, considering variables such as Demography, Claim settlement, Government regulation and Competition level as predictors of Life insurance pricing. This study employs an explanatory research design to explore the factors influencing life insurance pricing in the life insurance industry. The Data was collected through questionnaires from a census of 92 employees of Ethiopian Insurance Corporation’s life insurance department. The analysis utilized Pearson correlation and multiple regression techniques via SPSS 26.0 to assess the relationships between the independent variables and life insurance pricing. Findings indicate that all identified factors contribute to life insurance pricing; however, claim settlement has the most significant impact compared to demography, competition level and government regulation. Consequently, insurance companies should develop strategies to effectively address these factors to enhance the life insurance pricing strategy of the insurance sector. Keywords: Life insurance pricing, Demography, Claim settlement, Government regulation and Level of competition.Item The effect of incentive scheme in reducing agency cost of an organization(AAU, 2023-12-15) Sebsiba Kiros Beyene; Temesgen Worku (PhD)The primary goal of this study was to evaluate how incentive scheme impact in reducing agency costs within organizations. It sought to understand the root causes of agency costs and the effectiveness of incentive schemes in diminishing the conflict of interest between the principal and agent that creates agency cost. Data was gathered through a questionnaire, with the first section focusing on demographic details and the second section addressing questions related to the causes and effects of agency costs. Analysis was conducted using an ordinal scale, organizing responses numerically. The results underscored the significance of agency problems in generating agency costs and demonstrated the positive influence of incentive schemes in addressing them. The study advocates for the implementation of diverse incentive structures encompassing both intrinsic and extrinsic motivators. Additionally, it suggests enhancing the ownership stake of managerial personnel to effectively tackle agency costs within organizational setups.Item Determinants of Lending Interest Rate in Ethiopian Private Banks(AAU, 2024-01-13) Zenebe Ayalew Abebe; Takele Fufa (PhD)The aim of the study was to investigate the determinants of lending interest rate in Ethiopian private commercial banks by taking their audited financial times series data from 2010 to 2021. To meet the purpose of the study the researcher has been used an explanatory research design ,and quantitative research approach is employed to determine the effect of each independent variable on the dependant variable. To conduct analysis SPPSS (Version 26) and Stata version 17 statistical software were used in this study. The study’s dependant variable is lending interest rate, and the independent variables are Bank Size, profitability ratio, liquidity ratio, Deposit rate and inflation rate. The classical linear regression analysis result revealed that Bank Size, profitability ratio, and liquidity ratio are the significant independent variables to explain the dependant variable and these variables are inversely related with lending interest rate. On the other hand, Deposit rate and inflation rate are directly related with lending interest rate. Here, Deposit rate and inflation rate are statically significant in explaining the dependent variable. The study recommends, private commercial banks have to consider lending interest rate determinants in their lending rate determination while improving their internal inefficiencies. And also the central bank has to makes policies that encourage competition among the private commercial banksItem The Effect of Human Resource Management Practices on Innovation Performance with Moderating Factor of Network Competence at Nib International Bank(A.A.U, 2024-02-07) Million Demissie Gudeta; Zelalem G/Tsadik(PhD)This study aims to investigate the influence of human resource management (HRM) practices on innovation performance, considering network competence as a moderating factor within the context of NIB International Bank. This study employs a comprehensive research design, combining both descriptive and explanatory approaches, Quantitative methodologies are utilized, involving the distribution of structured questionnaires to personnel clerks and management officials from Nib International Bank's main office and selected branches, employing random sampling procedures to ensure representative participation, Data collection involves both primary and secondary sources, with standardized questionnaires adapted from reputable sources, utilizing five scale-based questionnaires, and gathered responses from a sample of 121 individuals. The analysis process involves utilizing statistical techniques, including regression and correlation, through the statistical package for social science (SPSS). The descriptive findings underscore the pivotal role of HRM practices in enhancing human resource management, emphasizing the significance of staying abreast of the latest technological advancements, fostering a conducive environment for career growth, providing development opportunities, recognizing employee contributions, and promoting work-life balance. The study recommends strategic improvements in these areas to further elevate innovation performance at NIB International Bank.Item The Impact of Liquidity and Solvency on Profitability in Ethiopian's Private Banks(AAU, 2023-12-28) Eyobed Miriye Tadesse; Tefferi Ghebray (PhD)This study aims to address the challenges associated with evaluating profitability in the Ethiopian banking industry, the evaluation of profitability within the Ethiopian banking industry faces challenges associated with the reliance on high annual gross profit as a comparative benchmark. This research addresses this issue by investigating and contrasting the influence of liquidity and solvency on the profitability of Ethiopian private banks. The primary objective is to establish an industry benchmark through a thorough desk review, evaluating the annual reports of Ethiopian private banks using liquidity, profitability, and solvency ratios. Adopting a case study research methodology, the study selects 16 private banks registered under the National Bank of Ethiopia based on the accessibility of their accounting statements. The analysis focuses on return on assets (ROA) as the dependent variable and considers current ratio, debt ratio, interest coverage ratio, and total debt to equity ratio as independent variables. The study employs correlation coefficient analysis and ANOVA F-test within the framework of multiple regression analysis to reveal statistically and practically significant findings. Notably, the research identifies a positive correlation between the current ratio and ROA, emphasizing the importance of liquidity in driving profitability among the sampled banks. Conversely, the study highlights a negative relationship between the debt ratio, interest coverage ratio, and ROA, underscoring the adverse impact of high debt and low interest coverage on profitability within the Ethiopian private banking sector. In conclusion, these findings underscore the critical significance of considering liquidity and solvency factors in the evaluation of profitability within the Ethiopian banking industry, providing valuable insights for stakeholders and policymakersItem The Impact Digitalization on Financial Performance of Private Commercial Bank (in Case of Bank of Abyssinia)(A.A.U., 2023-06-03) Demeke Engida; Takele Fufa (PhD)This study made to investigate the impact of digitalization on financial performance of bank of Abyssinia in Addis Ababa, Ethiopian. The main objective of study was to establish the impact of digitalization on financial performance of BOA. Specific objective were to identify the factors that influence customers to use digital banking, to study impact of digitalization of return on investment and to describe effect of digitalization risk or challenge on return on asset of organization. Quantitative and qualitative research methodologies were used. Quantitative researches were correlation and regression analysis. Data collection was used in data collection Pearson correlation coefficient helped the impact of digitalization on financial performance. On the other hand, inferential test linear regression analysis was used to analyze the impact of digitalization on financial performance. Descriptive survey was used while a questionnaire was used to gather primary data. The target study units for this paper were conveniently selected bank of Abyssinia. The study sample in term of the respondent covered the staff bank of Abyssinia and a sample of 111 was administered with the questionnaire and 63 % response rate was achieved. Statistical analysis was done with the aid of SPSS software and Stata software. These studied digitalization address internet banking automated teller machine, mobile banking, point of sale, and interactive teller machines. Based on the finding of study, it can be concluded that digitalization influence financial performance of BOA positively. The study showed that return on asset bank of Abyssinia increase in upward trends due to an increasing digitalization. These studies concluded that digitalization significantly and positively affect return on asset that digital transaction led to increase ROI. This paper didn’t include all bank digitalization and a future study is recommended to include Apollo, gize ,pay, and their impact of financial performance of bank of Abyssinia.Item Determinants of Financial Inclusion in an Era of Technology: In the Case of Commercial Banks in Ethiopia(AAU, 2024-01-09) Tilahun Gugssa Belayneh; Habtamu Berhanu (Phd.)Financial inclusion refers to a manner of providing financial institutes and smooth financial transaction mechanisms in an easy way. In addition, to exchange goods and services using that easy way of accessibility, availability, or proper implementation of the system for the people living in an economy. Financial inclusion enables the economy to grow sustainably by improving social well-being. In this era, technological innovation is one of the key successes for businesses to strengthen the maturity life of product life cycle, including the financial industry. Nowadays a need for speed in the delivery of products or services included in financial services. The role of financial inclusion in the economic and financial discourse has gained a lot of interest among both academia and practitioners. By what method could address financial inclusion becomes an interesting subject on the agendas of researchers, policymakers, regulators, and financial institutions. This is fundamental in developing countries like Ethiopia's marketplaces, where banking accessibilities and financial inclusions are comparatively low. The objective of this study is to investigate the determinants of financial inclusion in the era of technology in Ethiopian commercial banks. The type of research applied in this study is explanatory or causal. After a thorough review of previous empirical studies and current observations, a research questionnaire is developed as a means of data collection. Data collected from a total of 334 actual respondents from eighteen banks were used. The responses were evaluated with descriptive statistics and binary logistic regression analysis using SPSS version 25 software. The study revealed the variable electronic devices, occupation, education, and income are positive and significant factors in financial inclusion, whereas documentation has a negative and significant effect. As a result, the study recommended that policymakers, governments, financial institutions, and development organizations take into account the aforementioned financial inclusion elements in their attempts to address the problem of financial exclusion and combat poverty among certain segments of the populationItem Security Issues in Mobile Banking Service in Ethiopia(A.A.U, 2018-05-04) Biruk Argaw; Mesfin Fikre(PhD)The mobile banking services is one of the newly introduced services designed to enable customers transact 24 hours in a day and seven days a week without the need to go to the bank's counter. The major challenges for the adoption of mobile banking technologies are customer concerns about security therefore the major objective of this study is, to assess current security practices and customer protection of mobile banking service in Ethiopian banks. The research was conducted by using exploratory research design and focus on qualitative methods like focus group, interview and content analysis approaches have a foundation for the study and data analysis. The paper tried to explore and identify major potential security issues and protection challenges. In order to manage the issue of mobile banking security and enhancing customer protection, the paper tried to conclude and recommend that the banks would have implement best and strong security framework for prevention and detection mobile banking services. This should include customer education and awareness, strong authentication; secure mobile applications, strict account set up and management processes, real time detective services, and 24x7 customer supports.Item Case of Selected Edible Oil Factories in Amhara Region(A.A.U, 2023-06-06) Melat Habtemariam Abate; Yared Asrat(PhD)The purpose of the study was to examine the impact of supply chain integration on the performance of a selected food oil organization in the Amhara Region. Causal research was conducted, and data collection was acquired using questionnaire by sampling 135 member of the workforce which was then carefully scrutinized for consistency and continuity after formatting and processing. Multiple linear regression model was employed to foresee organizational performance from the dimensions of SCI, namely interna, external, information, measurement, customer, and supplier integration. The findings revealed that the six measurements of supply chain integration that were mentioned above explained 71.3% of the variance in organizational performance. Amongst all the independent variables, customer integration, information integration and measurement integration were found to be statistically significant with a p-value of less than 0.05, whereas internal, supplier and external integration were found to be statistically insignificant with a p-value greater than 0.05. Overall, the study summarized that out of all the independent variables, external integration, internal integration, and supplier integration were weighed less in relative to information integration, measurement integration and customer integration, indicating that former dimensions of SCI were not optimal in the organization. It is recommended that through system computerization, framework agreement and relationship management, all the six parameters of supply chain integration to be integrated at an optimum level towards attaining a highly effective OP.Item The impact of Human Resource Management Practices on Employees’ Satisfaction: A Case Study in Dugda Construction Company(A.A.U, 2022-06-09) Hailemichael Shemels; Yared Asrat(PhD)Employees who exhibit a strong commitment to their respective organizations typically display a high level of punctuality, dutifully adhere to corporate policies and are less prone to quitting their jobs, characteristics that are closely associated with employee retention. The present research endeavors to scrutinize the influence of human resource management (HRM) practices, namely (planning and recruitment, training programs, compensation and performance appraisal,) on employee satisfaction within the context of Dugda Construction. The primary aim of this study was to investigate the impact of HRM practices on employee satisfaction in Dugda Construction. Using a causal research design, primary data sources were employed and a random sample of 202 employees was selected. The primary data was generated from sample employees using a structured questionnaire. Simple descriptive statistical tools were employed with the assistance of SPSS software to analyze the data, which was presented using tables. Through regression analysis, this study established that planning and recruitment, training programs, compensation, and performance appraisal exert a significant impact on employee satisfaction. The findings demonstrate a positive correlation between HRM practices, namely (planning and recruitment, training programs, compensation, and performance appraisal,) and employee satisfaction in the context of a developing economy. Additionally, future research should explore the HRM-performance relationship, as well as the connection between HRM, employee work, working environment, culture, and employee well-being. To enhance company success, it is recommended that the organization improves the quality of HRM dimensions and provides training programs to enhance employee satisfaction. Furthermore, the company should increase transparency in the recruitment process for both current and potential employees. Finally, implementing a more equitable incentive system that offers employees additional benefits beyond the basics is crucial.Item Factors Affecting the Performance of Sesame Export: the case of Dangur Woreda, Metekel Zone, Benishangul Gumuz Regional State(A.A.U, 2023-06-08) Tsehaye Taye; Tewodros Wuhib (Ass. Professor)The main objective of this study was to identify factors affecting the performance of sesame export: The case of Dangur woreda, Metekel zone, Benishangul Gumuz Regional State. The research approach of this study is a mixed approach of descriptive and explanatory approach to analyze Liker scale type data. The researcher has selected five variables and the data was collected through structured questionnaires on linker scale measurement technique and some open-ended interview questions from a population of sesame seed exporters, producers and agricultural sector supporter basically agricultural transformation agency of the regional government. Linear regression models, Descriptive statistics and inferential analysis were employed to examine the effects of the selected variables on the performance of sesame seeds export performance in the study area. All necessary tests such as normality, homoscedasticity, linearity and null hypothesis tests were taken place. The findings implied that out of the selected five variables four variables like foreign price level, quality of the product, production/productivity and infrastructure were found to have significant effect on Sesame export performance in the study area where infrastructure is the most influential variable. Hence, it is recommended that developing all season rural feeder road and other important infrastructure service, introduction of modern agricultural technologies for product storage (silos) and constructing modern warehouses so that the quality of the sesame export can be maintained, support the producers in supplying modern agricultural technologies such as tractors, planters, sprayers and harvester machines to boost production/productivity and working on the stability of the foreign exchange rate.Item The Effect of Corporate Social Responsibility on Organizational Performance: In the Case of Ethio-Leather industry Company(A.A.U, 2023-06-08) Afrah Seid; Amare Abawa PHDThis study aims to evaluate The Effect of Corporate Social Responsibility on organizational performance in Ethio Leather Industry Company. Corporate social responsibility has been a topic of interest for many scholars until nowadays and it is very debatable. As per the reviewed literature, the subject has been given low attention in developing countries despite the contribution it has in bringing good reputation for the firms and the controversy in the subject is considered as a gap for this study. This study is Explanatory research which observes causal effect of the three variables (Philanthropic, Legal and Ethical Responsibilities) used to measure CSR by using quantitative research approach. In order to collect data Questionnaire has been distributed for a total sample size of 277 respondents. These questionnaires were distributed to the staff members of ELICO, and all of the responses were collected. Then after, for the data analysis the study uses linear regression analysis through SPSS software version 27 and all of the regression assumptions has been tested. According to the findings the beta value for Philanthropic responsibility=0.37, Beta value for Legal responsibility and Ethical responsibility has been found to be 0.24 and 0.38 respectively. Since the P value for every variable is >0.001, this implies that by keeping constant the other variables, for a unit increase in Philanthropic, Legal and Ethical responsibilities Organizational performance will be enhanced accordingly. Since the independent variable measures has direct and significant effect in performance, it is concluded that CSR has a positive and significant effect in organizational performance. Based on this conclusion it is recommended that the company needs to keep investing this CSR practices in an organized manner and they have to add this CSR practices in their strategic plan and they have to examine and measure the long term effect in the organizational performance.Item The Practices and Challenges of Foreign Currency Generation In Commercial Bank of Ethiopia(AAU, 2023-09-13) Tofik Rahmeto Issa; Tofik Rahmeto IssaThe main objective of the study is to examine the challenges of foreign currency generation in Commercial Bank of Ethiopia, using primary and secondary data source from a survey of a random sample of 386 respondents/employees. To deal with this, the researcher has used both descriptive and binary logistic regression model as a tool. In the descriptive analysis part the CBE’s share reached as low as 8% in 2020/21 from 32% 2014/15. The remittances that except 2015/16 and 2017/18 its growth rate gradually dropped. In econometrics analysis; internal conflict, absence of foreign currency deposit, less work with development partners and weak employees’ knowhow have a positive significant effect on the challenges of foreign currency generation at 1% level of significance (P<0.01) and makes low generation of foreign currency. Also, work with few industrial parks has a positive significant effect on the challenges of foreign currency generation at 1% level of significance (P<0.05). Few dominated agricultural export and National Bank of Ethiopia’s directives have a negative significant effect on the challenges of foreign currency generation at 1% level of significance (P<0.01). Furthermore, participated in Africa Opportunity and Growth Act, fair charges of money transfer organizations and less intermediaries have a negative significant effect on the challenges of foreign currency generation at 5% level of significance(P<0.05). The researcher has recommended that the government should stop the internal conflict and maintain peace and security in the country and formulate policies that help to participate in Africa Growth and Opportunity and Act. Also, the government should control illegal intermediaries. In addition, the Bank should work with industrial parks and development partnerItem Operational Challenges and Opportunities of Interest Free Banking in Ethiopia: The Case of Commercial Bank of Ethiopia(A.A.U, 2023-02-04) Mulushewa Kibret; Abebe Yitayew (PHD)The main objective of the study is examining the operational challenges and opportunities of Interest Free Banking in Ethiopia, particularly, in Commercial Bank of Ethiopia empirically. To accomplish the intended purpose of this study, survey method of descriptive research design was used to gather data. Primary data was collected through interviews and questionnaires to answer the research questions. In addition secondary data extracted from internal reports and survey of the bank. Respondents were sampled from IFB employees of Commercial Bank of Ethiopia to achieve the objectives of the study. Data was collected through questionnaire by using random sampling from a sample of 155 IFB staffs 135 were properly filled and returned the questionnaires. The data collected from the questionnaire were analyzed using SPSS statistical tools such as percentages and frequency. The result indicate that legal and regulation framework, low level of awareness of practitioners, lack of commitment, taxation related issues, lack of trust by customer about segregation of funds, wrong perception of Interest Free Banking or wrongly associated with religion and weak shari’ah experts functionality are the major challenges of IFB operation in Ethiopia. Further the finding of the study showed that interest free banking creates opportunity to the bank to mobilize the idle resource which was out of bank system through enhancing customer base and it is helpful to the economy as well. Thus, the National Bank of Ethiopia as a regulatory body, the government and banks should give more emphasis for the challenges that they face on the operation to have those mentioned opportunities and inclusive growths.