The Role of Private Commercial Banks on Corporate Social Responsibility in Ethiopia

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Addis Ababa University


The focus of this research is on the role of private commercial banks on corporate social responsibility in Ethiopia. The major objective of this study is to assess the role of private commercial banks on Corporate Social Responsibility in Ethiopia. The study has employed both descriptive and qualitative research strategies. The variables considered under this study are four factors: these are internal management – implementing meaningful strategy, process and people management; external management – accountability for creditability and external management -consideration of stakeholders. Primary data was collected via questionnaire from seven private commercial banks out of sixteen private commercial banks. Since stated owned and private commercial banks are different in many aspects. Stated owned commercial banks not included in study. The data was analyzed using likert 5 scales. For statistical interpretation mean and standard deviation was used. Statically Packages for Social Science software was used since it is appropriate for the study. Findings of the study has shown that private commercial banks of Ethiopian has looser attitude to support greener industries, lower lending options to low income individuals and small business, less engage in community development and less understanding on poor financial management in banking organizations which results to adverse effect to the environment and society, and less understanding on the idea that it is not fair holding more than three building collaterals which are offered by different mortgagors when a bank granting loan to single borrower. Since, it is not fair when a bank has offered to sell it via foreclosures which are owned by more than three different mortgagees for a single borrower which were held as collaterals by the bank for the loans and advance granted. The study has conclude that Corporate Social Responsibility requires more for the private commercial banks to pay special attention towards integration of social and environmental concerns in their business operations to achieve sustainability. So understanding the concept of corporate social responsibility in the banking sector and linking the concepts and frameworks and key elements of Corporate Social Responsibility in the banking policies and procedures is very vital to reduce risks emanate from not adhering Corporate Social Responsibility concepts. The relevance of knowing the Corporate Social Responsibility of banking has so many benefits to the bank and society at large. The researcher has recommended that the management of private commercial banks in Ethiopia should adhere to the need for Corporate Social Responsibility requires more for the banks to pay special attention to design and built forth programs and policies to enrich wealth knowledge of banking service staff and to understand their own position among the overall banking sector and also it is important for policymakers to judge the banking performance from the angle of corporate social responsibility. Key words: Corporate Social Responsibility, Role of commercial banks on Corporate Social Responsibility, concepts and frameworks of Corporate Social Responsibility



Corporate social responsibility, Role of commercial banks on corporate social responsibility, Concepts and frameworks of corporate social responsibility .