Determinants of Private Commercial Banks’ Deposit Growth in Ethiopia
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Date
2019-02
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Addis Ababa University
Abstract
The aim of this study to examine factors of Private commercial bank deposit growth in Ethiopia for the overall context Private commercial banks’ in Ethiopia has less contribution for deposit mobilization regarding with government owned bank . Therefore, Private commercial banks to contribute financial support and economic development substantial amount of deposit must be mobilized. In this regard Private commercial bank deposits are to support Private sectors investment and financing government project. In order to achieve this objective, in this study quantitative research approach has been used. Target population was eight Private Banks in commercial activates, out of the sixteen Private commercial banks selected with 10 years back in the industry and registered by NBE under operation in Ethiopia, and selected purposive sampling technique for the study. The panel data set for the study used secondary source consisted of annual data spanning from 2008 to 2017 gathered from the National Bank of Ethiopia. The dependent variable used to this study is deposit growth; explanatory variables used in this study were number of bank branch, loan to deposit ratio, economic growth (GDP), deposit interest rate, net interest margin, and age of company. Different diagnostic tests were conducted to check the appropriateness of the model. Fixed effects technique has been applied to find out the results of explanatory variables. According to the final results achieved by applying panel data techniques, number of bank branches, economic growth (GDP) and age of company had positively and statistically significant influence on private bank deposit growth; whereas, deposit interest rate and net interest margin are negative and statistically significant influence on deposit growth. Whereas loan to deposit ratio had negative and insignificant influence on private commercial bank deposit growth. The study implies that motivation of economic growth and the study recommended to the stockholders and users of the banking industry to expand number of branch and create appropriate awareness mechanisms for the society
Description
A thesis Submitted to Addis Ababa University, College of Business and Economics, Department of Accounting and Finance, in Partial Fulfillment of the Requirements for Degree of Master of Accounting and Finance
Keywords
Determinant factors, Commercial Bank of Ethiopia