Determinants of Bank‘s Deposit in Ethiopia: A case of Commercial bank of Ethiopia

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Date

2019-06

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Addis Ababa University

Abstract

The main objective of this study is to identify determinants of deposit mobilization in commercial bank of Ethiopia. Accordingly, the researcher adopts quantitative research approach. The reason for using such method on this study is due to usage of secondary data for analyzing the determinants of bank deposit. In this study time series data covering 1998 and 2018 was analyzed. First, the time series data were assessed using descriptive statistics for the variables as well as the test for unit root test, heteroskedasticity, autocorrelation and normality testing to know if the assumptions of CLRM violated or not. Accordingly the result of Unit root test (i.e. the data is stationery at first level both ; Augmented Dickey fuller test and Phillips-Peron tests ), Model Stability test(i.e. the study model was stable) , Heterodosicity test (there is no heteroscedasticity problem ), Autocorrelation test(as long as explanatory variables, regardless of their true significance there is no evidence for the presence of autocorrelation on the study) and Normality test(i.e. the study data were consistent with a normal distribution). Estimation was done using Ordinary Least Squares technique by E-views9 statistical package. The results from economic analysis showed that deposit has a positive relationship with GDP, individual foreign remittance, deposit interest rate and number of branch opening and a negative relation with inflation. Among these variables, branch opening is an important strategy for deposit mobilization, it is highly significant than others. Individual foreign remittances is also significantly affects CBE’s deposit next to branch opening. The data gathered from different organs were depicted in graph and it magnifies or clearly shows growth of each variables. Finally, the study ends with recommendations on determinants of deposit mobilization

Description

A thesis submitted to Addis Ababa university college of Business and economics in partial fulfillment of the Requirements for the degree of masters of business Administration

Keywords

Commercial Banks, Deposits mobilization, Determinants of bank deposits

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