Determinants of Commercial Banks Deposit in Ethiopia
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Date
2017-01
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Addis Ababa University
Abstract
This paper is an effort to reveal the insight dynamics that determine commercial banks deposit with
reference to Ethiopian commercial banks. In order to achieve this objective the study adopts mixed
research approach. Regarding to the qualitative data; the study used semi structured personal interview
from the employees of sampled commercial banks of Ethiopia. Regarding to quantitative data the study
referenced to Ethiopian commercial banks on basis of data covers sixteen years (1999/2000-2014/2015)
period and the data was gotten from the reports of the regulatory body of the banks in Ethiopia i.e. the
National Bank of Ethiopia (NBE), Central Statistical Authority, Ministry of Finance and Economic
Cooperation and from others that are as secondary data sources from the eight commercial banks of
Ethiopia. The Target population was all banks that engage in commercial activities and registered by
National Bank of Ethiopia to act. Consequently, eight banks, out of the eighteen commercial banks in
existence at 2014/15, have purposively been selected for the study. Result from using random effect panel
least square regression exhibited that number of branch, deposit interest rate, loan to deposit ratio,
annual inflation rate, real gross domestic product and population number were significant relationship
with commercial banks deposit. Results from interview social awareness and regulation of anti money
laundry and counter financial terrorism have an effect on commercial banks deposit. Finally the study
suggests that Ethiopian commercial banks specifically private owned banks have to open more branches
in order to more accessible to the society, as the same time to increase their deposit and competition with
the public banks. And also The Ethiopian commercial banks have to work on creating of awareness about
banking services by recruit sales persons, who have an experience in marketing, in order to
advertise the products and services of the commercial banks through door to door activities.
Key Words: Commercial Banks, Deposit, Ethiopia
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Keywords
Commercial banks; deposit; ethiopia