Effect of Prize awards transparency on deposit mobilization in commercial bank of Ethiopia
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Date
2020-06
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Addis Ababa University
Abstract
Deposit mobilization is one of the major problems of developing countries’ economies like Ethiopia. In its effort to mobilize deposit Commercial bank of Ethiopia (CBE) uses Prize linked savings (PLS) program which is a sales promotion tool. The major objective of this study is to examine how transparent is the bank’s PLS program on deposit mobilization so as to enhance its effectiveness. Four dimensional transparency measurement tools namely participation, substantial information, accountability and secrecy were utilized in measuring transparency of CBE’s PLS program. Hypothesizes were also developed testing the positive impact of these tools on deposit mobilization. Data was collected through self-administered questionnaires from 315 customers that were sampled across 20 branches of CBE supervised under four districts in Addis Ababa. After all appropriate statistical assumptions were checked and confirmed data were analyzed through descriptive and inferential statistical tools by the help of SPSS version 24. According to the data about 32% of the variation in deposit mobilization can be explained by the measurement of prize award transparency. Therefore the result shows that all proposed four transparency dimensions have significant positive effect on deposit mobilization indicating that ensuring transparency through the selected four dimensions results in increase in deposit mobilization as long as it is properly implemented. Finally it is recommended in the study that the bank should focus on enhancing and insuring openness bydisclosing required information in its prize linked activity so as to increase its effectiveness in deposit mobilization
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Keywords
Transparency, Prize-Linked saving program, deposit mobilization