Impact of Government Banking Policies on Private Banks Competitiveness in Ethiopia From 1994-2015
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Date
2015-06
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Addis Ababa University
Abstract
This study is intended to review impact government banking policies and directives on
private bank competitiveness from year 1994 to 2015. The study is done with the main
objective of assessing effects of regulations on resource mobilization and allocation
decisions of these private banks. To do so, the study employed qualitative research
approach in order to get better and deep information. Besides, both primary and
secondary data sources were used to examine the issue under discussion. To this end,
review of different secondary data was administered. In addition, to better triangulate
the study findings, interview with key informants was held.
Drawing documentary study and data from the primary sources, various issues of
government policies and directives was assessed. The study found out that despite
progress, Private Banks in Ethiopia have challenges from government policies and
directives which hinder their competitiveness. The empirical results show that, there is
no equal playing field between private and state owned banks, to begin with, the NBE
Bill is applicable only to private banks, Secondly public sector offices and enterprises
are forced to work with CBE and also
resources for condominium housing was
mobilized only by the public owned CBE, so, this unequal treatment of private and
state owned banks negatively affected private banks. Thus, government bodies should
revisit some directives issued on private banks, encourage the participation of the
private banks so as to play a vital role in the economy and private commercial banks
should strive to expand and grow since, their share is significant in terms of branch
networks and capital
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Keywords
Competitiveness