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