Determinants of Deposit Mobilization of Private Commercial Banks in Ethiopia
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Date
2020-06
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Publisher
A.A.U
Abstract
Effective mobilization of deposit plays a key role in keeping up the safety and reliability of
financial system in general and commercial banks in particular. The general objective of the
study is to investigate the determining factors of deposit mobilization of private commercial
banks in Ethiopia by using a balanced panel data of 10 private commercial banks from 2009 to
2018. In preparing this research only secondary information has been used. The secondary data
would be obtained from annual report of National Bank of Ethiopia and audited financial
statements of sample private commercial banks. Explanatory research approach, with a
quantitative research method was used to establish the causal effect relationship between
determining factors (variables) and deposit mobilization of private commercial banks. Six
determining variables (deposit interest rate, government expenditure, money supply, inflation,
liquidity ratio and return on asset) as explanatory variables have been used for the study. For
this study the researcher has used a purposive sampling technique from which 10 (ten) private
commercial banks, which would provide and had complete ten year data, have been selected.
The analysis process applied a quantitative technique of data presentation using tables and
percentages. The investigation result using pooled OLS estimator reveals that, Inflation,
government expenditure and return on asset have negative relationship with deposit growth of
private commercial banks, while money supply, interest rate and liquidity ratio have positive
relation with deposit growth of private commercial banks. Based on the findings and conclusion
the researcher recommends that the liquidity management team of the bank should manage and
supervise amount of asset which should be held as liquid assets so as to enhance deposit
mobilization of private commercial banks
Description
A Thesis Submitted To The Department Of
Accounting And Finance In Partial Fulfillment
Of The Requirement For The Degree Of Masters Of
Science (Msc) In Accounting And Finance
Keywords
Deposit mobilization, Private commercial banks