Factors influencing the Deposit Mobilization effect of Interest Free Banking service in Ethiopia (case of selected private commercial banks)

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Addis Ababa University


The study examined factors influencing the deposit mobilization effects of interest free banking service in selected private commercial banks. The study was conducted based on data collected from customers of the three banks through questionnaires and interview from experts of interest free banking services. To achieve the objectives of the study respondents were drawn from the selected three private banks of Oromia international bank s.c, Awash Bank s.c and United bank s.c using convince sampling. Data was collected through questionnaire by using cluster sampling from a sample of 382 and 359 were properly filled and returned. Besides, Semistructured interviews were used to guide for the qualitative data collection tools. The reliability of the data instrument were tested based on Cronbach Alpha r= 0.875 which is Good and Questionnaire validity were confirmed by the advisor, technical experts of IFB and using factor analysis (KMO) and Bartlett’s Test 0.656 which is close to 0.7 to ensure the questionnaires were consistent, clear and explains the variable under the study. The data collected from the questionnaire were analyzed using descriptive statistics, correlation and regression analysis with SPSS version 20 statistical tools. The hypotheses result of the study showed that the independent variable of Diversity of IFB service, Customer awareness and skilled manpower have a positive relationship and significance on deposit mobilization(dependent variables) of interest free banking service



Interest Free Banking, Deposit Mobilizations, Descriptive statistics