Factors Affecting Bank Branch Location in Ethiopia and the Power of GIS as Decision Support Tool: The Case of commercial bank of Ethiopia
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Date
2020-06
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A.A.U
Abstract
One of the most important decision-making processes in banks is site selection for a new branch and for Automated Teller Machine (ATM) location. The site has to be perfectly selected in such a way that the access for the target customers and the highest market potential would be assured. This study shows how a Geographic Information System (GIS) based model is used for locating suitable sites for opening new branches. The model was applied in Commercial Bank of Ethiopia. The main research question of this thesis is: “What are the factors that affect branch site selection in Ethiopia? How does GIS support decision making in branch location in the banking industry? The objective is showing the role of GIS in branch decision making in the banking industry specifically in Commercial Bank of Ethiopia (CBE) and also investigating the real factors of branch site decision in Ethiopia. The materials used for this thesis consist of both primary and secondary data from varied sources like Ethiopian Mapping Agency, district managers of CBE, some staffs in the district head office that are directly involved in the decision making, customers of CBE, and from ground survey. The type of data that was collected from these sources was about GIS based decision making process, factors influencing bank branch location, the manual decision making that has been used so far in CBE. The main research problem is lack of use of GIS in CBE in branch location decision and also absence of literature in Ethiopia about location factors of a bank. This study benefits those who are involved in banking business since it shows them how to use the fast, cheap, and accurate method GIS as decision support tool. Finally, the factors for branch site selection in the Ethiopian context were identified and based on the GIS analysis, the suitable places for locating bank branch in the study area were identified. Accordingly, 30km2 of the total GIS study area/Yeka sub city was found to be suitable for bank branch location.
Description
A Thesis Submitted To Addis Ababa University College Of Business And Economics, Graduate Studies In Partial Fulfillment Of The Requirement For The Degree Of Master Of Business Administration
Keywords
GIS, Factors, Location, Decision making