Determinants of Bank Deposit In Ethiopia: A Case of Awash Bank
No Thumbnail Available
Date
2021-04
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
A.A.U
Abstract
It is very important to identify factors determining the deposit of a bank and examine the relationship between exogenous and endogenous variables. The main purpose of this study is to investigate the determinants of Awash Bank deposit over a period of twenty six years. Explanatory research design and quantitative research approach were employed. The study identified bank-specific (profitability, loan to deposit ratio), and macroeconomic variables including, deposit interest rate and unemployment rate, as a target variable in determining bank deposit over the twenty six years of time series data from 1995 up to 2020. In order to answer the research question, secondary data was collected from financial statement of the bank, national bank of Ethiopia and central statistical agency of Ethiopia. Analysis was done by using descriptive statistics and multiple linear regression analysis with OLS and Granger causality model using STATA software package. The empirical findings showed that the overall regression model is significant, and also specifically, LTDR, UNER & PROF are significant at 1%. But, DIR is insignificant at 5%. The bank strongly advised to pay attention on both internal and external determinants. It had better if awash bank give strong emphasis on deposits and its determinant factors. And also bank ought to take a remedial action periodically for those influential determinants which has affected bank deposit significantly like profit, unemployment rate and loan to deposit ratio. And also the government should create job opportunities and reduce unemployment rate. Additionally, the researcher put the further suggestion that similar study to be conducted by covering a both primary and secondary source of data that might be determinant factors of commercial bank such as: technology, number of customer, service quality, and number of staff, inflation rate and other variables which have a qualitative and quantitative in nature
Description
Keywords
Awash Bank, Deposit, Determinants