An Investigation of Determinants of Deposit Mobilization in Commercial Banks of Ethiopia

Abstract

This study is mainly aimed to investigate factor that determine customer deposit mobilization by the commercial bank of Ethiopia by using data for 20 years. Both descriptive and econometric analysis has been applied in order to investigate factors that determine deposit mobilization in the case of commercial bank of Ethiopia. As determinants of customer deposit mobilization  in the bank five explanatory variable  such as , loan , existence of competitors  , interest rate ,  branch expansion were included .The result of the econometric result indicate that loan provision , branch expansion and  number of customers are found to have significant positive impact for the growth of deposit mobilization . However the emergence of new competitors and interest rate is not found to have positive impact to induce deposit mobilization in the bank. The study recommends expansion of banks in different areas as well as enhancing the number of the customers via different incentive provision and coping up with emerging competitors as potential means of promoting deposit mobilization.