Determinants Of Commercial Bank Deposits In Ethiopia A Case Of Commercial Bank Of Ethiopia

The survival of every commercial bank highly depends on bank deposit because depositrnmobilization is a major activity of all commercial banks. As the result, the issue of banksrndeposit and its determinants is crucial to the financial sector of developing country likernEthiopia. Therefore, this study aimed to identify and evaluate those factors affecting bankrndeposit in general by taking Commercial Bank of Ethiopia as evidence. Accordingly, thernresearcher adopts mixed research approach. The rationale of using such a mixed approach is torngather data that could not be obtained by adopting a single method.Regarding to the qualitativerndata; questionnaire is used to gather information from the employees of commercial bank ofrnEthiopia particularly for those employees who actively participated in deposit mobilizationrntasks in CBE city branches. Regarding to the secondary data; time series data covering 1998 -rn2014 was analyzed. First, the time series data were assessed using descriptive statistics for thernvariables as well as the test for heteroskedasticity, autocorrelation and normality testing tornknow if the assumptions of CLRM violated or not. Second, estimated model was a singlernregression equation with deposit as the dependent variable and explanatory variables as depositrninterest rate, overall inflation rate, number of branch opening, gross domestic product,rnindividual foreign remittance and dummy variable. Estimation was done using Ordinary LeastrnSquares technique by E-views7 statistical package. The results from economic analysis showedrnthat all the explanatory variables were positively correlated with the explained variable.rnAmong these variables, branch opening is an important strategy for deposit mobilization, it isrnhighly significant than others. Individual remittances from diasporas is also next to branchrnopening is significantly affects CBE’s deposit. The others are affects positively and canrnincrease CBE’s deposit. And finally, the study had recommended what should be done tornencouraging deposits growth by Commercial bank of Ethiopia for the benefit of the domesticrndeposit mobilization.rnKey words: Commercial Banks, Bank Deposits, Determinants of bank deposits

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