Determinants of Deposit Mobilization in the Case of Commercial Bank of Ethiopia Selected Branches

Abstract

Deposit mobilization is among one of the primary activities of banking system. Banks mobilize financial resource required for investment and economic growth from households, business, corporate bodies and government. To be effective, competitive in the market and maintain liquidity identifying factors affecting deposit mobilization is crucial. With this in mind the objective of this study is to identify determinants of bank deposit mobilization in the case of Commercial Bank of Ethiopia. To achieve this objective primary data collected through distributing 238 valid questionnaires to selected customers of the bank is primarily used. To complement primary data, secondary data is also used to some extent. Data analysis is handled quantitatively through the help of SPSS. The study findings shows that branch expansion, variety of services offered by the bank, confidentiality of customer information, trust on banking system and saving habits are found to be significant variables affecting deposit mobilization. More over interest rate and inflation are also among significant macroeconomic factors affecting deposit mobilization. Based on these findings recommendations are also forwarded.

Keywords: Bank Deposit, Commercial Banks

DOI: 10.7176/EJBM/12-13-04

Publication date:May 31^st 2020