Determinants of Commercial Banks Deposit Mobilization Evidence from Private Commercial Banks In Ethiopia

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Addis Ababa University


Deposit mobilization is a fundamental part of banking activity. (Banson, et al, 2012), well- defined that “mobilization of deposit for a bank is as essential as oxygen for human being” and “Deposits are the life blood of banking companies”. Hence, deposit mobilization is critical to Banks. The research tried to determine factors that affect deposit mobilization, the associated costs of deposit mobilization in private banks. Therefore, the study adopts mixed approach to gather the data. The primary data is gathered using questionnaire. Sampling method of the primary data is purposive sampling technique. While the secondary sources of data were extracted from annual reports of all private commercial banks of Ethiopia, data from National Bank of Ethiopia (NBE) and from Central Statistical Authority (CSA). Regarding the secondary data, the study used time series data from 2000-2014 for analysis made using Classical linear regression method. The study shows that, Age dependency ratio, Investment and money supply, are the most significant factors of deposit mobilization activity. The other variable such as Per capita income has insignificant power to influence the dependent variable. As a result, the study recommended that, Government should increase investment so as to promote economic growth to mobilize deposits since there exists a positive relationship between Deposit and Investment. And private banks ought to increase number of branches to mobilize more resources



Evidence from Private, Commercial banks In ethiopia