Business Administration in Finance

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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 banks
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.
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 policymakers
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.
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 population
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.
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.
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.
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.
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 PHD
This 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.
The Practices and Challenges of Foreign Currency Generation In Commercial Bank of Ethiopia
(AAU, 2023-09-13) Tofik Rahmeto Issa; Tofik Rahmeto Issa
The 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 partner
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.
Analysis of Competitive Strategies Adapted by Safaricom Ethiopia to Attain Market Leadership in Ethiopia
(A.A.U, 2023-05-03) Meron Sahle; Asres Abitie (PhD)
Rapid evolution in the internet and telecommunications technology has resulted in an increase in the numbers and modes of telecom access as well as its use. Safaricom Ethiopia has emerged as a new player in the telecom market in Ethiopia, with a lower current market share than all telecom businesses in Ethiopia. This study sought to determine the competitive strategies adopted by Safaricom Ethiopia to get market leadership in the market of Ethiopia, and the challenges experienced in applying the strategies. this research conceptualized and analyzed four dimensions of a competitive strategy: cost leadership, differentiation, corporate growth, and focus and test their relationships in the respective market leadership. The study used both qualitative and quantitative approaches and the target population for this study was managers at Safaricom Ethiopia. This population was chosen because the managers are the ones who perform strategy formulation and implementation. The target population was managers from all seven departments at Safaricom Ethiopia. The relationships proposed in the framework were tested using Pearson correlation, and the causal relations were analyzed using regression analysis. The data was collected by distributing questionnaires to the departments that are key to the design, implementation, marketing, technology, resourcing, and customer support of telecom services at Safaricom Ethiopia. The data were analyzed using descriptive and inferential statistics and presented using frequency, mean, correlation, and regression, and the findings were presented in the table. The research findings have shown that competitive strategies have a positive significant effect on market leadership This study also revealed that government policy and regulation mediate the competitive strategies and market leadership relationship. The study concluded that Safaricom has been utilizing cost leadership, focus, and differentiation strategies to attain market leadership. The study recommends that this paper is only on the case of Safaricom Ethiopia, and future research should consider other business organizations.
The Effect of Customer Experience on the Share of Wallet Across Pharmaceutical Wholesalers in Addis Ababa, Ethiopia.
(Addis Ababa University, 2023-06-06) Getahun Tigistie; Ethiopia Legesse(Dr)
The focus of businesses worldwide is to increase customer satisfaction and hence customer loyalty. But this traditional approach neglects the important role of Share of wallet. This study aims to identify factors that affect the share of wallets among pharmaceutical wholesalers in Addis Ababa, Ethiopia. There is a lack of study on the effect of customer experience on share of wallet in Ethiopia as well as globally which in turn result in a knowledge gap. Therefore, this study fills the gap in the literature. A quantitative approach using a convenience sampling technique, and a crossectional study was conducted for this research. SPSS V20 was performed to analyze the data. Descriptive and binary logistic regression statistical tools were used to examine the relationship between Customer experience attributes and Share of Wallet. The self-administrated questionnaire was used to assess the customer experience of the pharmacies across Addis Ababa (Value, Customer Service, Delivery, and Demand Forecasting) while one item was used to measure the share of wallet (SOW); the outcome variable. The study result reveals that Delivery and Demand Forecasting was a positive significant predictor of share wallet across pharmaceutical wholesalers across Addis Ababa. On the contrary, the hypotheses testing revealed that Value and Customer service were nonsignificant predictors of share of wallet across pharmaceutical wholesalers across Addis Ababa. Lastly, practical recommendations were raised.
The Effect of Financial Sector Development on Domestic Investment in Ethiopia: An Empirical Investigation
(A.A.U, 2023-06-04) Haregewoyn Deyu; Amare Abawa, PhD
It is widely agreeable that investment is the engine for growth. Similarly, financial institutions play a critical role to stimulate economic growth by mobilizing financial resources and availing it to investors. The study examined how domestic investment is affected by the development of financial sector in Ethiopia for the years 2000-2022. “Broadmoney supply” as a measure of “Financial Depth”, “Bank Credit to Bank Deposit” as a measure of Banks’ Intermediation Efficiency, and “domestic credit to the private sector”representing “Financial Activity” were used to measure “financial sector development”. The study employed an Auto regressive Distributed Lag (ARDL) model. It applied all relevant pre and post estimation tests to ensure that the model is well specified and free from anticipated time-serious problems. The results of the study justified that the effect of “financial sector development” on “domestic investment” in Ethiopia depends up on the measurement of financial sector development used. In this regard, “Financial Activity” has a positive and significant effect on domestic investment in the long run. However, it has a negative and significant effect in the short run. Conversely, both “Financial Depth” and intermediation efficiency has a negative and significant effect on domestic investment in the long run. Similarly, “Financial Depth” has a negative and significant effect on domestic investment in the long run. The researcher recommended that government should monitor the supply of money so that inflation will be controlled and domestic investment will be enhanced. Besides, banks should intensify credit to the private sector by intensifying their resource mobilization endeavour so that domestic investment will be enhanced in the long run. However, decision makers should exercise caution when selecting financial sector development metrics as a tool for promoting domestic investment.
The Impact of Digitalization on Bank Profitability: The Case of Selected Commercial Banks in Ethiopia
(A.A.U, 2022-03) Mekonnen, Mekdes; Yitayew, Abebe (Dr.)
This research examines the impact of digitization on commercial bank profitability in Ethiopia, using return on equity as a proxy for profitability. The study selected nine commercial banks operating in Ethiopia between 2018 and 2021 using secondary data and a purposive sampling technique. In addition, primary data was obtained by a questionnaire on 311 sample branches of the nine commercial banks that were chosen. Key variables were determined based on existing literature to reveal their link and impact on commercial bank profitability. Number of mobile banking transactions, ATM transaction value, internet banking transaction value, number of internet banking users, and mobile banking transaction value were the factors studied. The value of ATM transactions had a positive and significant impact on the bank's profitability as measured by return on equity, which may be related to the reduction of the bank's own overheads and transaction-related operational costs associated with hosting and serving the customer at a branch's counter as a result of making basic financial services more accessible to the customer. As a consequence of the findings, it was determined that digitalization has a beneficial impact on operational excellence and service quality, which would have resulted in higher commercial bank profitability. However, the study found that the number of Internet banking users and the value of mobile banking transactions are both negative and insignificant. The researcher recommended that commercial banks should consider commission based mobile and internet banking transaction and exert maximum effort to increase the number of active users. The researcher conclude that with the existing digitalization efforts of the Ethiopian banks goes with and supported by new national digital strategy of the country and ultimately brings better returns on investment.
The Effect of Technological Innovation Uptake on the Financial Performance of Commercial Banks in Ethiopia
(A.A.U, 2022-04) Darge, Elbethel; Berhanu, Habtamu ( Dr.)
A technological innovation is a new or improved product or process whose technological characteristics are significantly different from the way they were before. Technological innovation is highly used by the banking sector to create competitive advantage. It helps banks improve their services and become more cost efficient. The aim of conducting this research is to identify the effect of technological innovation on the financial performance of the Ethiopian commercial banks. The study used secondary data which was gathered from the published annual reports of the banks. The collected data was analyzed using Eviews 9. An econometric regression model was used to determine the relationship between technological innovation and financial performance for a period of seven years (2015 – 2021). Financial performance, measured by Return on Asset (ROA), was the dependent variable. Technological innovation, measured by number of internet banking users, number of mobile baking users, number of ATMs, number of debit card holders and number of POS terminals were the independent variables. Bank size was also used as a control variable to avoid the omission of important variables. The results of the regression showed that there is a positive relationship between internet banking, ATMs, POS terminals and bank size with ROA while mobile banking and debit cards have a negative one. It also showed that while the effects of internet banking, mobile banking, debit cards, POS terminals and bank size were significant, the effect of ATMs, was insignificant. The study recommends that banks should work more on creating awareness about technological innovation and integration of their systems with other banks.
The Challenges and Benefits of Financial Inclusion in Ethiopia
(A.A.U, 2022-03) Haile, Tesfaye; Duresso, Degefa (Dr.)
The past two decades have seen a rapid increase in interest in financial inclusion, both from policymakers and researchers. In recognition of the role of access to finance in contributing to rapid economic growth and poverty reduction, Ethiopia developed National financial Inclusion strategy for five-year from 2017 – 2022. In this study, the progress, challenges and benefits of financial inclusion in Ethiopia studied and analyzed based on access, quality, usage and Impact/welfare indicators of financial inclusion. In this study, information collected from secondary source, face-to-face interviews with regulatory and financial service providers, report reviews and literature reviews used. Primary data collected from Financial Service providers to assess their current practices in relation to financial inclusion. The findings of the study indicated the progress of financial inclusion in Ethiopia is behind other sub- African countries. Further, this study revealed that barriers to access and usage of financial services categorized under demand and supply-side constraints including enabling environment/governance, infrastructure and technology. The study also indicated the existence of gender gap where Female are still excluded and lack of meaningful coordination among the stakeholder listed in NFIS, 2017 are another barriers to achieve financial inclusion goals. Therefore, policymakers should emphasize strategies that foster access to and use of financial services. As highlighted under the recommendations of this study, addressing the root causes (barriers) identified and promoting new technologies, the elimination of challenges and expansion of financial inclusion tends to be possible. For example, digital financial services, diversification of access points, mobile banking, internet banking, and credit facilities improvement financial inclusion and in return all-inclusive economic growth. Use of biometric devices instead of Identification card (ID) can reduce costs, attract excluded persons, speed up transfers and increase the security of household transactions.
The Effect of Motor Insurance Risk Management Practice on Performance the Case of Ethiopian Insurance Corporation
(A.A.U, 2022-04) Kebede, Kassahun; Abitie, Asres
Insurance fraud is one of operational risk challenging almost all insurance companies. In Ethiopian Insurance Corporation fraud has evolved over time from inflating of legitimate claim submitting fake accident report and fraud perpetrated on both claim and policy underwriting process. The objective of the study is to examine and analyze the nature and status of motor insurance fraud and risk management practice in Ethiopian Insurance Corporation. The study was descriptive and explanatory research design was used for the study with a target population of 243 respondents and a sample size of 151. From the study findings, it was found that the type of motor insurance fraud was claim and underwriting fraud are predominating and mainly perpetrated by internal and external bodies through collusion. Additionally, most claim lodged were inflated that was caused as a result of lack of appropriate punishment to fraudsters, poor internal controls and greed. Moreover, the study was indicated that the company‘s strategic approach to motor insurance fraud management is passive. The study concluded that based on multiple regression analysis, 49.6 % variation in organizational performance is explained by the employed explanatory variable i.e. preventive fraud management practice, detective fraud management practice, and responsive fraud management practice. However, the major proportion that is 50.4 % variation in organizational performance not explained. This indicates that additional elements, such as financial and nonfinancial considerations, were not included in the study. The study achieves that preventive fraud management practice, detective fraud management practice, and responsive fraud management practice are the key factors that affect the performance of the company in the Ethiopian Insurance Corporation. Furthermore, the study recommends that the company should create consolidated central database of all motor policies in order to identify suspected fraudulent claims
An Assessment of Credit Risk Management Practice: The Case of Awash Bank S.C
(A.A.U, 2022-12) Moges, Abiy; Birhanu, Habtamu ( Dr.)
Credit risk is an essential factor that needs to be managed. Credit risk is the possibility that a borrower or counter party will fail to meet its obligations in accordance with agreed terms. Credit risk is one of the most vital risks for any commercial bank. Credit risk arises from nonperformance by a borrower. Among the risks that face bank’s credit risk is one of great concerns to bank authorities and banking regulators. This is because credit risk is that can easily and most likely prompts bank;s failure. Managing credit risk is not a simple task comprehensive consideration and practices are needed for identifying, measuring, controlling and minimizing credit risk. The focus of this research is to assess the credit risk management of Awash Bank. In this study, the researcher utilized simple random sampling technique in order to select participants of the study. For the purpose of this study, both primary and secondary data were used. Primary data were collected through questionnaires distributed to respondents found in head office credit risk management and related directorates. Descriptive statistics such as percentages, frequencies and tables were used to analyze and present the data. The study found that non-performing loans (NPL) percentage of the bank’s credit is increasing time to time. This is due to lack of continuous follow up and proper risk assessment and the current political and contagious diseases (i.e. Covid-19). Also, the bank’s procedure was not effective in reducing the NPL status and it needs to be improved. Based on the findings, the paper recommends that in ensuring the existence of proper and clear guidelines in managing credit, the top managements support is less and needs to be improved. Also, innovation on new ways of dealing with borrowers is necessary for banks to be able to recover their loan.

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