The Case of the Formal Credit Market in Ethiopia
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Date
2000-06
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A.A.U
Abstract
This paper examines the determinants of credit market equilibrium in Ethiopia using cross-section data obtained from borrowers of the Commercial Bank of Ethiopia and the bank itself. In this paper we explore some of the important variables that significantly affect the quantity of loan demanded and the respective loan size approved by the bank.
The results thus obtained suggest that the availability of collateral is an important factor influencing the loan size borrowers request to secure and the size of loan lenders are willing to extend to their Potential borrowers.
It is also learned that, apart from the existence of close ties with Borrowers, the presence and level of excess liquidity is an Important variable for banks while making their lending decisions
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The Formal Credit Market in