Determinants of Commercial Banks Deposit Growth Evidence from Ethiopian Commercial Banks

Habtamu Alebachew Legass; Anwar Adem Shikur; Omer Mohammed Ahmed

doi:doi:10.11648/j.jfa.20210906.11

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Determinants of Commercial Banks Deposit Growth Evidence from Ethiopian Commercial Banks

Habtamu Alebachew Legass, Anwar Adem Shikur, Omer Mohammed Ahmed

Published in Journal of Finance and Accounting (Volume 9, Issue 6)

Received: 21 September 2021 Accepted: 28 October 2021 Published: 5 November 2021

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Abstract

The purpose of this research is to examine major causes of deposit growth in commercial banks in Ethiopia with explicit inference on industry specific and Macro-Economic variables. The research used secondary data from 2010-2019. Macro-economic factors selected under this study consist of age dependency ratio, unemployment rate, population growth, broad money supply, and Inflation. While bank-specific variables included are branch expansion and bank size. Since the study employed panel data in line with the nature and data of the study ordinary least square method estimation were used subsequently after the necessary diagnostic tests and Hausman test performed to determine the appropriateness of fixed effect. The result of the study indicate branch macroeconomic factors such as bank size, broad money supply, and inflation significant positive effect on deposit growth of commercial banks. Contrarily, Age dependency ratio and population growth have a statistically significant negative effect on deposit growth. The unemployment rate, on the other hand, has been found to have a positive but statistically insignificant relationship. The bank-specific factors indicate the branch expansion has a positive significant association while Bank size has a positive but insignificant relationship with deposit growth of commercial banks. Finally, the study suggests there should be a stable macroeconomic environment that reduces the effect of inflation, money supply, population growth, and from a bank-specific perspective aggressive branch expansion is essential for the growth of deposits in commercial banks in Ethiopia.

Published in	Journal of Finance and Accounting (Volume 9, Issue 6)
DOI	10.11648/j.jfa.20210906.11
Page(s)	207-215
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2021. Published by Science Publishing Group

Keywords

Deposit Growth, Panel Data, Fixed Effect

References

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APA Style

Habtamu Alebachew Legass, Anwar Adem Shikur, Omer Mohammed Ahmed. (2021). Determinants of Commercial Banks Deposit Growth Evidence from Ethiopian Commercial Banks. Journal of Finance and Accounting, 9(6), 207-215. https://doi.org/10.11648/j.jfa.20210906.11

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ACS Style

Habtamu Alebachew Legass; Anwar Adem Shikur; Omer Mohammed Ahmed. Determinants of Commercial Banks Deposit Growth Evidence from Ethiopian Commercial Banks. J. Finance Account. 2021, 9(6), 207-215. doi: 10.11648/j.jfa.20210906.11

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AMA Style

Habtamu Alebachew Legass, Anwar Adem Shikur, Omer Mohammed Ahmed. Determinants of Commercial Banks Deposit Growth Evidence from Ethiopian Commercial Banks. J Finance Account. 2021;9(6):207-215. doi: 10.11648/j.jfa.20210906.11

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@article{10.11648/j.jfa.20210906.11,
  author = {Habtamu Alebachew Legass and Anwar Adem Shikur and Omer Mohammed Ahmed},
  title = {Determinants of Commercial Banks Deposit Growth Evidence from Ethiopian Commercial Banks},
  journal = {Journal of Finance and Accounting},
  volume = {9},
  number = {6},
  pages = {207-215},
  doi = {10.11648/j.jfa.20210906.11},
  url = {https://doi.org/10.11648/j.jfa.20210906.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jfa.20210906.11},
  abstract = {The purpose of this research is to examine major causes of deposit growth in commercial banks in Ethiopia with explicit inference on industry specific and Macro-Economic variables. The research used secondary data from 2010-2019. Macro-economic factors selected under this study consist of age dependency ratio, unemployment rate, population growth, broad money supply, and Inflation. While bank-specific variables included are branch expansion and bank size. Since the study employed panel data in line with the nature and data of the study ordinary least square method estimation were used subsequently after the necessary diagnostic tests and Hausman test performed to determine the appropriateness of fixed effect. The result of the study indicate branch macroeconomic factors such as bank size, broad money supply, and inflation significant positive effect on deposit growth of commercial banks. Contrarily, Age dependency ratio and population growth have a statistically significant negative effect on deposit growth. The unemployment rate, on the other hand, has been found to have a positive but statistically insignificant relationship. The bank-specific factors indicate the branch expansion has a positive significant association while Bank size has a positive but insignificant relationship with deposit growth of commercial banks. Finally, the study suggests there should be a stable macroeconomic environment that reduces the effect of inflation, money supply, population growth, and from a bank-specific perspective aggressive branch expansion is essential for the growth of deposits in commercial banks in Ethiopia.},
 year = {2021}
}

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TY  - JOUR
T1  - Determinants of Commercial Banks Deposit Growth Evidence from Ethiopian Commercial Banks
AU  - Habtamu Alebachew Legass
AU  - Anwar Adem Shikur
AU  - Omer Mohammed Ahmed
Y1  - 2021/11/05
PY  - 2021
N1  - https://doi.org/10.11648/j.jfa.20210906.11
DO  - 10.11648/j.jfa.20210906.11
T2  - Journal of Finance and Accounting
JF  - Journal of Finance and Accounting
JO  - Journal of Finance and Accounting
SP  - 207
EP  - 215
PB  - Science Publishing Group
SN  - 2330-7323
UR  - https://doi.org/10.11648/j.jfa.20210906.11
AB  - The purpose of this research is to examine major causes of deposit growth in commercial banks in Ethiopia with explicit inference on industry specific and Macro-Economic variables. The research used secondary data from 2010-2019. Macro-economic factors selected under this study consist of age dependency ratio, unemployment rate, population growth, broad money supply, and Inflation. While bank-specific variables included are branch expansion and bank size. Since the study employed panel data in line with the nature and data of the study ordinary least square method estimation were used subsequently after the necessary diagnostic tests and Hausman test performed to determine the appropriateness of fixed effect. The result of the study indicate branch macroeconomic factors such as bank size, broad money supply, and inflation significant positive effect on deposit growth of commercial banks. Contrarily, Age dependency ratio and population growth have a statistically significant negative effect on deposit growth. The unemployment rate, on the other hand, has been found to have a positive but statistically insignificant relationship. The bank-specific factors indicate the branch expansion has a positive significant association while Bank size has a positive but insignificant relationship with deposit growth of commercial banks. Finally, the study suggests there should be a stable macroeconomic environment that reduces the effect of inflation, money supply, population growth, and from a bank-specific perspective aggressive branch expansion is essential for the growth of deposits in commercial banks in Ethiopia.
VL  - 9
IS  - 6
ER  -

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Author Information

Habtamu Alebachew Legass

Department of Accounting and Finance, College of Business and Economics, Dire Dawa University, Dire Dawa, Ethiopia
Anwar Adem Shikur

Department of Accounting and Finance, College of Business and Economics, Dire Dawa University, Dire Dawa, Ethiopia
Omer Mohammed Ahmed

Department of Accounting and Finance, College of Business and Economics, Addis Ababa University, Addis Ababa, Ethiopia

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Plain Text BibTeX RIS

APA Style

Habtamu Alebachew Legass, Anwar Adem Shikur, Omer Mohammed Ahmed. (2021). Determinants of Commercial Banks Deposit Growth Evidence from Ethiopian Commercial Banks. Journal of Finance and Accounting, 9(6), 207-215. https://doi.org/10.11648/j.jfa.20210906.11

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ACS Style

Habtamu Alebachew Legass; Anwar Adem Shikur; Omer Mohammed Ahmed. Determinants of Commercial Banks Deposit Growth Evidence from Ethiopian Commercial Banks. J. Finance Account. 2021, 9(6), 207-215. doi: 10.11648/j.jfa.20210906.11

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AMA Style

Habtamu Alebachew Legass, Anwar Adem Shikur, Omer Mohammed Ahmed. Determinants of Commercial Banks Deposit Growth Evidence from Ethiopian Commercial Banks. J Finance Account. 2021;9(6):207-215. doi: 10.11648/j.jfa.20210906.11

Copy | Download

@article{10.11648/j.jfa.20210906.11,
  author = {Habtamu Alebachew Legass and Anwar Adem Shikur and Omer Mohammed Ahmed},
  title = {Determinants of Commercial Banks Deposit Growth Evidence from Ethiopian Commercial Banks},
  journal = {Journal of Finance and Accounting},
  volume = {9},
  number = {6},
  pages = {207-215},
  doi = {10.11648/j.jfa.20210906.11},
  url = {https://doi.org/10.11648/j.jfa.20210906.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jfa.20210906.11},
  abstract = {The purpose of this research is to examine major causes of deposit growth in commercial banks in Ethiopia with explicit inference on industry specific and Macro-Economic variables. The research used secondary data from 2010-2019. Macro-economic factors selected under this study consist of age dependency ratio, unemployment rate, population growth, broad money supply, and Inflation. While bank-specific variables included are branch expansion and bank size. Since the study employed panel data in line with the nature and data of the study ordinary least square method estimation were used subsequently after the necessary diagnostic tests and Hausman test performed to determine the appropriateness of fixed effect. The result of the study indicate branch macroeconomic factors such as bank size, broad money supply, and inflation significant positive effect on deposit growth of commercial banks. Contrarily, Age dependency ratio and population growth have a statistically significant negative effect on deposit growth. The unemployment rate, on the other hand, has been found to have a positive but statistically insignificant relationship. The bank-specific factors indicate the branch expansion has a positive significant association while Bank size has a positive but insignificant relationship with deposit growth of commercial banks. Finally, the study suggests there should be a stable macroeconomic environment that reduces the effect of inflation, money supply, population growth, and from a bank-specific perspective aggressive branch expansion is essential for the growth of deposits in commercial banks in Ethiopia.},
 year = {2021}
}

Copy | Download

TY  - JOUR
T1  - Determinants of Commercial Banks Deposit Growth Evidence from Ethiopian Commercial Banks
AU  - Habtamu Alebachew Legass
AU  - Anwar Adem Shikur
AU  - Omer Mohammed Ahmed
Y1  - 2021/11/05
PY  - 2021
N1  - https://doi.org/10.11648/j.jfa.20210906.11
DO  - 10.11648/j.jfa.20210906.11
T2  - Journal of Finance and Accounting
JF  - Journal of Finance and Accounting
JO  - Journal of Finance and Accounting
SP  - 207
EP  - 215
PB  - Science Publishing Group
SN  - 2330-7323
UR  - https://doi.org/10.11648/j.jfa.20210906.11
AB  - The purpose of this research is to examine major causes of deposit growth in commercial banks in Ethiopia with explicit inference on industry specific and Macro-Economic variables. The research used secondary data from 2010-2019. Macro-economic factors selected under this study consist of age dependency ratio, unemployment rate, population growth, broad money supply, and Inflation. While bank-specific variables included are branch expansion and bank size. Since the study employed panel data in line with the nature and data of the study ordinary least square method estimation were used subsequently after the necessary diagnostic tests and Hausman test performed to determine the appropriateness of fixed effect. The result of the study indicate branch macroeconomic factors such as bank size, broad money supply, and inflation significant positive effect on deposit growth of commercial banks. Contrarily, Age dependency ratio and population growth have a statistically significant negative effect on deposit growth. The unemployment rate, on the other hand, has been found to have a positive but statistically insignificant relationship. The bank-specific factors indicate the branch expansion has a positive significant association while Bank size has a positive but insignificant relationship with deposit growth of commercial banks. Finally, the study suggests there should be a stable macroeconomic environment that reduces the effect of inflation, money supply, population growth, and from a bank-specific perspective aggressive branch expansion is essential for the growth of deposits in commercial banks in Ethiopia.
VL  - 9
IS  - 6
ER  -

Copy | Download