Mobilization of Domestic Financial Resource through Commercial Banks for Economic Development of Ethiopia
No Thumbnail Available
Date
2016-06
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Addis Ababa University
Abstract
Commercial banks are the main players in the financial system of Ethiopia performing financial
intermediation. They control greater portion of the investment funds from domestic deposits and are
the main creditors of the corporate bodies, micro finance institutions and individuals in various
sector of the economy. The purpose of this study therefore was to identify the most effective and
efficient ways commercial banks in Ethiopia employ to maximize the volume of domestic deposits.
Thus, the study aims to evaluate the design of bank products and services, assess their effectiveness
of harnessing domestic deposits and challenges they face in mobilizing deposits. This research has
used relevant books, journals, annual reports, websites, and other publications to frame questions.
Data from commercial banks on deposits they received from 2005 to 2014 and from in-depth-
interview were used to analyze and the come to conclusion. Results from the analysis indicated that
deposits mobilization of Commercial Banks in Ethiopia shows an
upward trend but the rate of
annual increment is at a decreasing rate. Total deposit is dominated by the public bank (CBE) .The
bank also dominates the industry in financing the economy through loan. However, the competition
among commercial banks is very critical to enhance efficiency in the overall contribution of the
banking sector to the economy. The study also reveals significant contribution of branch network in
the domestic resource mobilization of commercial banks in Ethiopia. The study’s recommendations
is that private commercial banks should be aggressive and more competitive in terms their financial
mobilizing through increasing branch network and availing different product to bank users
Description
Keywords
Mobilization