Possibility Of Syndicate Lending In Ethiopia Banking Industry

There is a considerable expansion of the volume of syndicated loans in emergingrnmarkets in the recent years. While until recently large majority of loanrntransactions in Ethiopia historically have been bilateral transactions that arernprovided by single banks.rnThis thesis empirically investigates factors that influence the possibility ofrnsyndicate lending in Ethiopia banking industry using the financial information ofrn8 banks for the period of 2005-20 10.rnThe study investigate significant role of loan characteristics and of lending limit,rnliquidity, capital adequacy and concentration on the possibility of syndicaternlending on Ethiopia banking industry.rnThe result of the study indicates that lending limit and liquidity positivelyrninfluences the possibility of syndicate lending in Ethiopia banking industry whilerncapital adequacy and concentration negatively influences. This shows Banksrndoes not join loan syndication when their capital levels are sufficient enough tornsupport the extra risk taken.rnThe results of the study also support the efforts of authorities to increase bankingrncompetition and efficiency, and to implement binding banking regulation onrncapital requirement to promote the possibility of syndicated loan.rnPo

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