Investigation of Potential Benefits and Challenges of Foreign Banks Entering the Ethiopian Banking Sector
No Thumbnail Available
Date
2023-05-04
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
A.A.U
Abstract
In principle, foreign bank entry might meaningfully reduce the cost of credit by getting capital,
technical skills, and product development to host country, which increases competition and
leads to enhancements in the competence of the banking area, the main objective of this study is
to examine how the local banking sector can be affected by the introduction of foreign banks.
To achieve this, both qualitative and quantitative research approach were employed, and
descriptive research design was engaged to describe the benefits and challenges related with
foreign bank entry into the Ethiopian commercial banking business, the researcher used a
combination of stratified and purposive sampling techniques to choose the samples for the
study. The research conducted using statistical analysis such as average mean, standard
deviation, frequency, and percentage on 162 survey questionnaires with the aid of SPSS
statistics 23, it was found that the banking sector in Ethiopia is expressively affected by the
permission of foreign banks. The local commercial banks in Ethiopia might face both good
and undesirable concerns due to the entry of foreign bank. According to key findings, local
banks would advantage in numerous ways if foreign banks were allowed to work in the
Ethiopia. This contains improvements in many sides, such as possible benefits, efficiency,
monetary and societal indicators, and possible costs. Therefore, it is recommended that
entry of foreign banks in the nation could be useful for both the local banks and the country
as a whole.
Description
Keywords
Foreign Banks, Domestic Banks, Macro Economic Indicators