Cogent Economics & Finance

ISSN: (Print) (Online) Journal homepage: https://www.tandfonline.com/loi/oaef20

Determinants of private commercial banks deposit

in Ethiopia

Meseret Dame Tafa & Solomon Tessema Worku

To cite this article: Meseret Dame Tafa & Solomon Tessema Worku (2022) Determinants of
private commercial banks deposit in Ethiopia, Cogent Economics & Finance, 10:1, 2098608,
DOI: 10.1080/23322039.2022.2098608

To link to this article: https://doi.org/10.1080/23322039.2022.2098608

© 2022 The Author(s). This open access

article is distributed under a Creative
Commons Attribution (CC-BY) 4.0 license.

Published online: 08 Aug 2022.

Submit your article to this journal

Article views: 3701

View related articles

View Crossmark data

Citing articles: 2 View citing articles

Full Terms & Conditions of access and use can be found at

https://www.tandfonline.com/action/journalInformation?journalCode=oaef20
Dame Tafa & Tessema Worku, Cogent Economics & Finance (2022), 10: 2098608
https://doi.org/10.1080/23322039.2022.2098608

FINANCIAL ECONOMICS | RESEARCH ARTICLE

Determinants of private commercial banks
deposit in Ethiopia
Meseret Dame Tafa1 and Solomon Tessema Worku2

Received: 26 January 2022

Abstract: This study aimed to investigate the determinant of private commercial
Accepted: 02 July 2022 bank deposits in Ethiopia over eighteen years (2000–2017). To achieve the research
Corresponding author: Solomon objectives, an explanatory research design and a quantitative research approach
Tessema Worku, Department of were employed. In addition, the study has targeted sixteen private commercial
Economics, Salale University, College
of Business & Economics, Fitche, banks currently operating in Ethiopia. Data obtained from selected banks were
Ethiopia
E-mail: [email protected]
analyzed by using descriptive statistics and random effect model analysis. The
regression result shows that three internal variables such as loan to deposit ratio,
Reviewing editor:
David McMillan, University of Stirling, profitability and the number of bank branches and two macroeconomic variables
UNITED KINGDOM
such as unemployment rate and economic growth rate have a significant effect on
Additional information is available at the total deposit of private commercial banks. Based on the study finding,
the end of the article
researchers recommended that all private commercial banks are required to
aggressively expand their branches comparatively to the commercial bank of
Ethiopia, and government bodies should give more attention to sustainable eco­
nomic growth and should work on unemployment reduction.

Subjects: Accounting And Finance For Events; Business, Management And Accounting;
Accounting; Cost Accounting; Financial Accounting; Government & Non–Profit Accounting;
International Accounting; Management Accounting

Keywords: Deposit mobilization; private commercial banks; remittance; deposit ratio;

Ethiopia

ABOUT THE AUTHORS PUBLIC INTEREST STATEMENT

Meseret Dame Tafa is a Senior Lecturer of Ethiopia is one of the developing nations in which
Accounting and Finance at the College of the financial sector is not well developed and
Business and Economics in Salale University, needs more participation of government and
Ethiopia. Her current research interest lies in the private investors to enhance financial sector as
fields of Accounting and Finance, Financial different financial activities takes place in tradi­
Management, Public Finance and Finance. tional ways. In this study, we have examined
Solomon Tessema Worku is a Senior Lecturer of that determinants of private commercial banks
Economics at the College of Business and in Ethiopia as economic growth recommended
Economics at Salale University, Ethiopia. He attracting higher deposit and unemployment
served at the position of research and community rate inversely related to deposit. The higher
services coordinator in Salale University. He also earning capacity of the citizen is expected to
served as a Lecturer of Economics and head of enhance their ability to deposit, and this
department of Economics at Bule Hora University, enhances the deposit growth of the bank. The
Meseret Dame Tafa Ethiopia. His current research interest lies in the general finding of this study is the country’s
fields of Development Economics, Financial stunning interest on enhancing the financial
Economics, Public Economics and Finance. sector with specific to the increasing role of pri­
vate sector participation in solving financial pro­
blem of the country.

© 2022 The Author(s). This open access article is distributed under a Creative Commons
Attribution (CC-BY) 4.0 license.

Page 1 of 15
Dame Tafa & Tessema Worku, Cogent Economics & Finance (2022), 10: 2098608
https://doi.org/10.1080/23322039.2022.2098608

1. Introduction
Deposit is one of the assets that banks are highly motivated to mobilize, the most liquid money
that is available in the treasury of the bank, which is ready to be borrowed in need of the funds
(Yusuf, 2001). Therefore, the development of financial institutions and the level of deposit mobi­
lization add a lot to the economic growth of developing countries where the level of monetization
is weak (Gebeyew, 2013). Nowadays, the activities of all commercial banks are primarily focused
on deposit mobilization and providing loans (Otu & Peter, 2015). Thus, without enough bank
deposits, financial institutions might fail to attain their business targets and economic growth
enhancement (Viswanadham et al., 2013). Thus, the extent to which banks play as an intermediary
depends on the level of advancement of the financial sector and the level of deposit mobilization
(Bahiredin, 2016).

HoweverIn lin with this, several past study indicated still in developing countries of Sub-Saharan
Africa (SSA), like Ethiopia, financial institution have not been well-developed to play critical role of
intermediation because of under- banked and banks have limited banking services compared to
the rest of the world (Woldegiorgis, 2010 and Garedachew, 2008). Other studies in Ethiopia also
conclude that private commercial banks in Ethiopia are in their infant phase and level of deposit
mobilization is also very low (Shemsu, 2015). This indicates that the amount of deposit mobilized
by banks in the country is not sufficient to satisfy the demand of investors who engaged in the
economic development of the country. Moreover, nowadays, public bank, which is Commercial
bank of Ethiopia (CBE), aggressively expanded its business in all places of the country. CBE has
remained potent and is in the lead in terms of assets, deposits, capital and customer base
(Shemsu, 2015). For instance, as National Bank of Ethiopia report, in 2017/18, CBE was trying to
receive more deposits, 64.5 percent of total deposits of the industry, by introducing attractive
savings schemes, and because of its large number of bank branch expansion, the share of private
commercial banks is limited to less than 35% of total deposit mobilized in the industry. Thus, the
amount of deposit a private commercial banks have at hand is not sufficient to make the bank
engage in the market activities and to satisfy the financial desires of its customers. Hence,
depending on this general fact, the private commercial banks should be expected to mobilize
sufficient deposit, so that mobilizing and managing deposits is not achievable without under­
standing and controlling the factors affecting it.

In line with this, many studies have been conducted in abroad countries on determinants of
commercial bank deposits; to the best of researchers' knowledge, most abroad country studies
focused more on macroeconomic variables rather than investigating both micro (bank specific)
and macro (beyond to bank) determinants of bank deposits. For instance, the study conducted by
Nathanael (2014), Hassan (2016), Mashamba & Gumbo (2014), Mohammad & Mansur (2014) and
Simon-Oke & Jolaosho (2013) tried to analyze the effect of different macroeconomic indicators, on
the bank deposits. Most of the time, at the global level, as stated by the above researchers, the
determinant variables usually explained as factors determining the deposit amount are the
deposit interest rate and gross domestic product. However, all the authors have stated a different
finding on the determinants of commercial bank deposit and its relationship with total deposit and
their findings may not be applicable to other countries like Ethiopia, due to differences in social,
economic and legal environments.

In other hand, few studies in Ethiopia by Andinet (2016), Bahiredin (2016), Mamo (2017) and
Giragn (2015) also show contradictory findings. For example, the study conducted by Mamo (2017)
shows that bank branch expansion had positive and significant effects on total deposit, while,
according to Tizita (2014), bank branch expansion has a negative effect on bank deposits. On the
other hand, a study performed by Bahiredin (2016) showed that loan to deposit has a significant
negative influence on the commercial bank deposits. Contradictory to this, finding by Fisseha
(2017) stated that the loan to deposit ratio has a positive and significant influence on bank
deposit. Moreover, all those researchers conducted their studies on public bank, which is

Page 2 of 15
Dame Tafa & Tessema Worku, Cogent Economics & Finance (2022), 10: 2098608
https://doi.org/10.1080/23322039.2022.2098608

Commercial Bank of Ethiopia only. This indicates that it is very difficult to generalize their findings
into private commercial banks.

A limited study corresponding with this research is that the research conducted by Andinet (2016)
considering limited explanatory variables, which are number of bank branches, deposit interest rate,
inflation and GDP (economic growth). However, all studies conducted in Ethiopia including Andinet
(2016) have not incorporated the unemployment rate and individual foreign remittance growth as a
variable. In addition to this, Andinet (2016) and other researchers listed above also concluded and
suggested that Ethiopian commercial bank deposits is affected by other additional factors, which are
not included in the previous studies, Because of this reason, the area needs additional study. To sum
up, this research tries to fill the gap by considering the most important determinant variables, which
are used by previous researchers, and add unemployment rate and individual foreign remittance
growth rate, which are not included in previous studies. Therefore, the research is aimed to examine
the effect of the number of branches, deposit interest rate, loan to deposit ratio, GDP, remittance
growth rate and unemployment rate on Ethiopian private commercial bank deposits.

2. Empirical literature review

A number of empirical studies have been carried out by different scholars in different countries on
the determinants of commercial bank deposits. The researcher Lomuto (2008) conducted a study
on the determinants of Kenyan commercial bank deposits growth in Kenya. The study result
showed that the deposit interest rate, lagged Commercial bank deposits and economic growth
have a significant effect on banks total deposit. Depending on the study results, the researcher
recommends on the need for macroeconomic stability and the establishment of conditions that
attract private investment, strengthening bank supervision and the legal infrastructure, which
enhances financial stability and strongly suggests on deregulation on the real deposit rate of
commercial bank deposit. At the end, the authors concluded that determinants of bank deposit are
not similar among countries. Therefore, the study recommended further research to better under­
stand which factors are more affecting commercial bank deposits.

According to Pham Minh Dat (2020) and P. M. Dinh Tran Ngoc Huy (2020), to provide required
service to customers and to satisfy their needs, commitment of commercial banks is crucial. In
addition, it is necessary to coordinate synchronously between the management and administra­
tion of commercial bank policies with fiscal policies, monetary policies (used as effective tools to
stimulate bank over all products) and other economic development policies to limit the negative
effects of the lending rate, risk free rate and exchange rate on commercial banks performance.

Another study conducted by El (2017) examined the factors determining the bank deposit in
Morocco for 2003–2014. The researcher employed panel data regression for analysis purpose. The
study result shows that bank’s deposits are significantly determined by banks size, both internal
and external funding and interest rate on deposits. Finally, the researcher concluded that custo­
mers as well as bank deposits are strongly determined by the unemployment rate rather than
other variables.

The study conducted by Peter & Charles (2014) on remittance as financial sector development
argue that remittances adversely affect financial sector development since these capital flows are
informal, altruistic and purposely intended for household consumption. The study additionally argues
the association between remittances and bank deposits as being positive although statistically
insignificant. This finding indicates the absence of a relation between bank deposits and remittance
inflow to the residence country. Therefore, theoretical and empirical records on the effect of remit­
tances on economic growth, financial sector development and commercial bank deposit growth are
unclear; the relationship among remittances and bank deposit growth remains a matter of argument.

The studies performed by Mashamba & Gumbo (2014) discuss the relationship between the deposit
interest rate and deposit mobilizations in Zimbabwe. The study result indicates that a positive

Page 3 of 15
Dame Tafa & Tessema Worku, Cogent Economics & Finance (2022), 10: 2098608
https://doi.org/10.1080/23322039.2022.2098608

relationship between deposit rates and bank deposits for the period under study and all the other
explanatory variables were statistically significant. Depending on the research results, the researchers
suggested to banks to tap into the unbanked markets through massive branch expansion, offering
low-cost accounts and increasing interest offered on deposits to attract more deposits.

Among the few research studies conducted on the subject in Ethiopia, the researcher’s has
selected the following study as the empirical literature for this research. The study conducted in
Ethiopia shows that the loan to deposit ratio and bank branch expansion positively and signifi­
cantly influence total deposits of public commercial banks, whereas competitor’s influences total
deposit negatively and significantly; the study by Mamo (2017) and other study by Giragn (2015)
concluded that commercial bank deposit mobilization is significantly and negatively affected by
the branch expansion, inflation, exchange rate and money supply growth.

In addition, the study by Bahiredin (2016) empirically analyzed determinants of commercial

bank deposit growth in Ethiopia. The regression result showed that the number of branches and
growth of per capita income have a positive and significant influence on bank deposits growth in
Ethiopia, whereas the loan to deposit ratio and lagged bank deposit have a negative and sig­
nificant influence on bank deposit growth. Finally, research conducted by Andinet (2016) showed
that the explanatory variables deposit interest rate; number of bank branches, GDP and net
interest margin were significantly and positively correlated with the explained variable., while
lagged value of bank deposit was significantly and negatively correlated with total deposit.

In general, from the above empirical works in foreign country, all the authors have stated contra­
dicted findings and their findings may not be applicable to other countries like Ethiopia, due to
differences in social, economic and legal environments. Few studies conducted in Ethiopia on the
determinants of commercial bank deposits are limited to public banks, which are commercial banks
of Ethiopia. Therefore, this study helps to fulfill the study area gap by conducting this research on the
private commercial banks. As per researcher’s knowledge, only the study conducted by Andinet
(2016) on private commercial banks is similar towith this study. However, the study failed to take
into account some macroeconomic variables such as individual foreign remittance growth and
unemployment rate. As stated by El (2017), unemployment rates have a high influence than other
macroeconomic variables on total deposits of commercial banks. But all the stated studies conducted
in Ethiopian commercial banks have not incorporated unemployment rate and foreign remittance as
variables that determine commercial bank deposit. Therefore, this study fills the information gap by
incorporating those variables as independent variables in the study.

3. Research methodology

3.1. Research design

Explanatory studies are necessary in such a study where a situation or problem leads to the
explanation of the relationship between variables (Saunders & Thornhill, 2009). Therefore, the
researchers employed explanatory research designs to see the regression analysis result with
respective empirical literature studies on the determinants of bank deposit in Ethiopia.

3.2. Research approach

In this study, the quantitative research approach was used. The basic reason for using this type of
quantitative research approach is to collect secondary data that have quantitative nature, and it is
possible to test the relationship between the variables used in this study.

3.3. Data source

To achieve the study objectives, researchers collected data from secondary data sources. Thus, for
variables considered as dependent and independent, in the study, data were collected from NBE and
selected banks annual reports, Central Statistical Agency of Ethiopia and other relevant data sources.

Page 4 of 15
Dame Tafa & Tessema Worku, Cogent Economics & Finance (2022), 10: 2098608
https://doi.org/10.1080/23322039.2022.2098608

3.4. Population for study

In 2018, there are sixteen private commercial banks that operate in Ethiopia. Therefore, to
examine the determinants of total deposit in private commercial banks of Ethiopia, all sixteen
private commercial banks operating in Ethiopia are considered as the target population for this
study.

3.5. Sample size and sampling technique

Researchers believed that the sample size is representative as it includes the banks that
dominate a market position in terms of bank branches, total asset, deposit amount, loans
and annual profit. Therefore, in this study, six private commercial banks are selected. Those are
Awash International Bank, Dashen Bank, Bank of Abyssinia, Wegagen Bank, United Bank and
Nib International Bank.

3.6. Model specification

In this research, a random effect is employed to estimate effects of independent variables on
dependent variables. According to Cooper & Schindler (2009), the general random effect model
with X independent variables is written as follows:

Yit ¼ βXit þ a þ uit þ εit;

where Yit is observations of the dependent variable, Xit is the ith observation of the independent
variables, β is the regression coefficients of the ith observation, uit is between entity errors and εit is
within entity error. Hence, the deposit (DEPO) is the dependent variable of the model, while the
following are independent variables affecting deposit:

● β1, β2, β3, β4, β5, β6, β7 and β8 represent the regression coefficients or parameter to be estimated;

● NOBRA it: Number of branches for bank i at time t;

● DIR it: Interest Rate on the Commercial Bank Deposits for bank i at time t;
● PROF it: Profitability for bank I at time t;

● RGDP it: real gross domestic product for bank i at time t;

● LDPR it: Loan to Deposit Ratio (Liquidity Ratio);
● UNER it: Unemployment rate for bank i at time t;

● IFRG it: individual foreign remittance growth for bank i at time t;

● t: Time (2000–2017 years);

● µit: Represents error terms for intentionally/unintentionally omitted or added variables.

3.7. Variables measurement and expected result

Based on the research hypothesis, the following relationships are expected for the commercial
bank deposits and selected determinant factors.

3.8. Data analysis and presentation technique

The research paper analysis is based on the quantitative research approach. The study used
the balanced panel data of six private commercial banks in Ethiopia. To analyze, interpret
and summarize the data, researchers adopted descriptive statistics including mean, standard
deviation, maximum and minimum, computed by using Stata software and random effect
model applied to test the relationship between dependent variables and explanatory
variables.

Page 5 of 15
Dame Tafa & Tessema Worku, Cogent Economics & Finance (2022), 10: 2098608
https://doi.org/10.1080/23322039.2022.2098608

4. Results and discussion

4.1. Descriptive analysis

The mean for natural logarithm of total deposits of private commercial banks is 8.233624 percent,
and the standard deviation was 1.436593 percent with a minimum of 4.0855 percent and a
maximum of 10.8273 percent. The maximum deposit is recorded by Nib international bank in
the year 2016, and the minimum deposit is recorded by Dashen bank after its establishment in
2002. Depending on minimum and maximum values, it can be concluded that the private com­
mercial bank deposit fluctuates between 4.0855 and 10.8273, respectively. The standard deviation
also stated that there is the variation of deposit amount among sampled private commercial
banks during the study period (2000–2017).

The mean of the loan to deposit was 71% with a std. dev. of 14.87%. The minimum and
maximum values of the loan to deposit were 48.85 and 115.79 percent, respectively. The max­
imum loan to deposit 115.78 percent was registered in the year 2000 by the United Bank, meaning
that the loan to deposit ratio is 100% and greater than that means a bank loaned one birr to
customers for every birr received in deposit they received, while the minimum amount of loan to
deposit ratio was recorded by Wegagen bank in 2011. Depending on these descriptive results, it
can be concluded that the loans to deposit ratio was lower dispersed among private commercial
banks in Ethiopia.

The mean value of the bank branch of the private commercial banks included in this study is
68.15741. The minimum and maximum value of size is 5 and 313, respectively. Moreover, the
standard deviation for the number of bank branches was 64.49765. From the result, Awash
Bank has the maximum number of branches rather than other private commercial banks
during the study period (313). This descriptive result shows that private commercial banks
expanded their branch network continually in the study period. The standard deviation of the
bank branch shows that there is a low dispersion among private commercial banks regarding
the branch expansion.

Regarding the deposit interest rate of commercial banks of Ethiopia, the mean value of deposit
interest rate is 4.33333% with a maximum of 7% and a minimum of 3%. On the other hand, the
minimum and maximum values of deposit interest rate paid to depositors are 3% in the year
2002–2007 and 7% in 2001, respectively. There was little variation of interest rate towards its
mean value over the periods under study with the standard deviation of 1.1601.

The average ROA for the last 18 years for Ethiopian private commercial banks is 2.74747 with a
standard deviation of 0.9318%. The minimum ROA is 0.2, and the maximum is 4.7; the minimum
return on asset of 0.2% was generated by the Bank of Abyssinia in 2002, and the maximum
return on asset of 4.7% was generated during the study period in 2011 by Wegagen bank. This
indicates that there is little gap in profitability between Ethiopian private commercial banks. The
average value of individual remittance from the Diaspora growth rate was 28.1722%. The
maximum and the minimum values of remittance from foreign were 70% and 2.1%, respectively.
The maximum individual foreign remittance growth was registered in 2000, and the minimum
was recorded in the year 2012. The standard deviation of individual foreign remittance was 18%,
which shows that there were high significant variations among the values of remittance growth
during the study period.

4.2. Correlation analysis

Cooper & Schindler (2009) suggested that a correlation of above 0.8 should be corrected for the
above-mentioned variables, since it is a sign for multicollinearity problems. Also, Hair et al.
(2006) argued that the correlation coefficient below 0.9 may not cause serious multicollinearity
problems.

Page 6 of 15
Dame Tafa & Tessema Worku, Cogent Economics & Finance (2022), 10: 2098608
https://doi.org/10.1080/23322039.2022.2098608

Table 1. Summary of variables measurement and its expected result

Proxy variables Symbol Measurement Expected result
Deposit DEPO Natural logarithm of total
deposit
Number of bank branches NOBRA Number Of Branches At +
The End Of theYear
Deposit Interest Rate ADIR Average Deposit Interest +
Rate Of The Year
Loan To Deposit Ratio LTDR Total Loans and +
Advances/Total deposit
Profitability PROF ROA = net income after +
tax/total asset
Economic growth GDP Measured by Real GDP +
growth rate of Ethiopia
Individual foreign IFRGR Foreign Remittance -
remittance growth growth rate
Unemployment rate UNER Annual unemployment -
rate
Source: Developed by researchers (2020)

Table 2. Descriptive statistics results and discussion

Variable Obs. Mean Std. Dev. Min Max
DEPO 108 8.233624 1.436593 4.08255 10.8273
LTDR 108 .7150974 .1487637 .48847 1.15789
NBBR 108 68.15741 64.49765 5 313
DIR 108 .0433,333 .0116008 .03 .07
PROF 108 .0274,747 .0093179 .002 .047
INFRG 108 .2817222 .1799918 .021 .7
GDP 108 .0883889 .0388067 −.021 .126
UNER 108 .2018333 .0405895 .163 .269
Source: Stata output (2020)
As shown in the Table 2, the descriptive statistics of the study, there are 108 observations and balanced data collected from
six private commercial banks over the period 2000 to 2017. As shown in the Table 4.6, the descriptive statistics of the study,
there are 108 observations and balanced data collected from six private commercial banks over the period 2000 to 2017. The
mean for natural logarithm of total deposits of private commercial banks is 8.233624percent, and the standard deviation
was 1.436593 percent with a minimum of 4.0855 percent, and a maximum of 10.8273 percent. The maximum deposit is
recorded by nib international bank in the year 2016 and the minimum deposit is recorded by Dashen bank after its
establishment in 2002. Depend on minimum and maximum values it can be concluded that the commercial bank deposit
fluctuates between 4.0855 and 10.8273 respectively. The standard deviation also stated that there is the variation of deposit
amount among sampled private commercial banks during the study period (2000-2017).As shown in the Table 4.6, the
descriptive statistics of the study, there are 108 observations and balanced data collected from six private commercial banks
over the period 2000 to 2017. The mean for natural logarithm of total deposits of private commercial banks is 8.233624per­
cent, and the standard deviation was 1.436593 percent with a minimum of 4.0855 percent, and a maximum of 10.8273
percent. The maximum deposit is recorded by nib international bank in the year 2016 and the minimum deposit is recorded
by Dashen bank after its establishment in 2002. Depend on minimum and maximum values it can be concluded that the
commercial bank deposit fluctuates between 4.0855 and 10.8273 respectively. The standard deviation also stated that there
is the variation of deposit amount among sampled private commercial banks during the study period (2000-2017).

The correlation matrix computed in Table 3 shows that there are fairly low data correlations
among the independent variables. This means that the correlations between the variables within
the study do not exceed 0.8.

As shown in Table 3, the coefficient of correlation between the total deposit and the number of
bank branches was 0.6939. The result reveals that there is strong positive correlation between the
bank deposit and the number of branches of private commercial banks over the last 18 years. The

Page 7 of 15
Dame Tafa & Tessema Worku, Cogent Economics & Finance (2022), 10: 2098608
https://doi.org/10.1080/23322039.2022.2098608

Table 3. Correlation matrix of dependent and explanatory variables

DEPO LTDR NOBBR DIR PROF INFRG GDP UNER
DEPO 1
LTDR −0.5874 1
NOBBR 0.6939 −0.4404 1
DIR 0.1072 −0.1697 0.3147 1
PROF 0.2412 −0.1818 0.0792 −0.0641 1
INFRG −0.4206 0.4768 −0.4533 −0.1115 −0.1434 1
GDP 0.4925 −0.2808 0.2335 −0.0216 0.6022 −0.0633 1
UNER −0.7091 0.4337 −0.5494 0.0071 −0.5621 0.2629 −0.6595 1
Source: Stata output (2020)

correlation coefficient of private commercial bank deposit and loan to deposit ratio was −0.5874,
which is a negative relation. The coefficient of correlation between the bank deposit and the
deposit interest rate was 0.1072, and the result shows that the weak and positive relation exists
between total deposits of private commercial banks and deposits interest rate. The coefficient of
correlation between the total deposit and profitability was 0.2412. The result shows that a weak
and positive correlation exists between bank deposits and profitability. The coefficient of correla­
tion between bank deposit and individual foreign remittance growth was −0.4206. This result
indicates that a lesser negative correlation exists between the total deposit and remittance
growth. The coefficient of correlation between commercial the bank deposit and economic growth
(GDP) was 0.4925, and this output shows that there is a moderate and positive relationship
between those variables. The last variables coefficient of correlation between the commercial
bank deposit and the unemployment rate was −0.7091. This means that there is a strong negative
correlation between the deposit and the unemployment rate.

Moreover, the unemployment rate was positively correlated with the loan to deposit ratio,
deposit interest rate and individual foreign remittance growth with correlation coefficients of
0.4337, 0.0071 and 0.2629, respectively, whereas it was negatively correlated with the number
of bank branches, profitability and GDP with correlation coefficients of −0.5494, −0.5621 and
−0.6595, respectively. GDP negatively correlated with the loan to deposit ratio, deposit interest
rate and foreign remittance growth with correlation coefficients of −0.2808, −0.0216 and −0.0633.
However, economic growth (GDP) was positively correlated with the bank branch and profitability
with correlation coefficients of 0.2335 and 0.6022, respectively. The individual foreign remittance
has a negative relationship with the number of bank branches, profitability and deposit interest
rate with correlation coefficients of −0.4533, −0.1434 and −0.1115, respectively. It has a positive
correlation with a loan to deposit ratio of 0.4768. Furthermore, from the above correlation matrix,
profitability has a negative relation with the loan to deposit ratio and a positive relation with bank
branch with correlation coefficients of −0.1818 and 0.0792, respectively.

The deposit interest rate positively correlated with the number of bank branches as well as
negatively correlated with the loan to deposit ratio (0.3147 and −0.1697). At the end, the bank
branch negatively correlated with the loan to deposit ratio with a correlation coefficient of −0.4404.

4.3. Random effect regression result

Accordingly, as Normality, Multicollinearity, Autocorrelation and model specification test result
shows, there is no evidence of violation with all diagnostic tests. In addition, the Hausman
specification test was conducted and as per the result, the random effect model was selected.

Now, from the regression result, we can substitute the values of coefficients and find the
following equation:

Page 8 of 15
Dame Tafa & Tessema Worku, Cogent Economics & Finance (2022), 10: 2098608
https://doi.org/10.1080/23322039.2022.2098608

DEPO = 12.47751 – 1.998126LTDR + 0.0070043NOBBR − 5.216579DIR − 28.5124PROF −

0.7648422INFRG + 7.803967GDP -−13.66136UNER + µit.

From the DEPO regression model result, the R-squared statistics and its overall R-square for
DEPO are 0.7263 and 0.7137; this indicates that the R-square (correlation coefficient) measures the
correlation between the regressed variable and the explanatory variable with 0.7263 well explain­
ing the model.

The overall R-square (coefficient of determination) also measures the proportion of the total
dispersion in dependent variables explained by the regression model. This implies that the changes
in the independent variables are 71.37% of the changes in the total deposit of private commercial
banks. On the other hand, the loan to deposit ratio, number of bank branch, deposit interest rate,
profitability, individual foreign remittance growth, economic growth and unemployment rate are
collectively 71.37% of the changes on DEPO. The remaining 28.63% of the changes of the total
deposit measure model in this study was explained by other factors that are not included in the
model. Thus, these variables jointly are good explanatory variables of the total deposit of private
commercial banks in Ethiopia.

The overall model is strongly significant (P-value = 0.0000) with an R2 value of 72.63% and its
overall R2 is about 71.37% in the model. A P-value of 0.000 indicates strong statistical significance
of the specified model, which enhanced its reliability and validity.

From the random effect regression result of Table 4, constant = 12.47751 shows that if all the
independent variables (number of branch, deposit interest rate, loan to deposit ratio, profitability,
economic growth (GDP), individual foreign remittance and unemployment rate) are rated a zero,
DEPO is rated as 12.47751.

Table 4. Regression result

Random-effects GLS regression Number of obs = 108
Group variable: code Number of groups = 6
R-sq: within = 0.7263 Obs per group: min = 18
Between = 0.5604 avg = 18.0
Overall = 0.7137 max = 18
Wald chi2(7) = 261.05
corr(u_i, X) = 0 (assumed) Prob> chi2 = 0.0000
DEPO | Coef. Std. Err. Z P>|Z| [95% Conf. Interval]
LTDR | -1.998126 0.6422379 -3.11 0.002* -3.25689 -.7393633
NOBB | .0070043. 17915 3.91 0.000* .003493 .0105155
DIR | -5.216579 7.039007 -0.74 0.459 -19.01278
8.579621
PROF | -28.5124 11.772 -2.42 0.015 ** -51.58509
-5.439709
INFRG | -.7648422 0.5177668 -1.48 0.14 -1.779646
.2499621
GDP | 7.803967 2.809382 2.78 0.005 * 2.297679 13.31025
UNER | -13.66136 3.353309 -4.07 0.000* -20.23372
-7.088995
_cons | 12.47751 1.040962 11.99 0.000 10.43727 14.51776

*& ** denotes significance at 1% and 5% level respectively.

Source: Stata output (2020).

Page 9 of 15
Dame Tafa & Tessema Worku, Cogent Economics & Finance (2022), 10: 2098608
https://doi.org/10.1080/23322039.2022.2098608

4.4. Discussion

4.4.1. Number of bank branches

The number of bank branches has a positive relation with total bank deposits with a coefficient of
0.0070043 and a p-value of 0.000 at the 1% significance level. This indicates that one unit change
(increase/decrease) in the bank branch, keeping the other things constant, can result in a change
in deposit by 0.0070043 units in the similar direction. Therefore, bank branches are essential to
collect the sufficient amount of deposit. In other hand, as private commercial banks expand their
branches aggressively in unbanked areas, more and more people are accessible to the banking
system and more people would be willing to deposit their idle cash or at least a part of their wealth
into deposits. The study finding is closely similar to the study results of Nathanael (2014), Hassan
(2016), Shemsu (2015), Bahiredin (2016) and Andinet (2016). The result is also against and
contrary to the work of Tizita (2014). Based on the result, hypothesis is not rejected and we can
also conclude that a number of bank branches had positive and significant effects on commercial
bank deposits. Totally, based on the previous study result and our finding, the bank that has more
number of branches in the unbanked area generates a more amount of deposit.

4.4.2. Deposit interest rate

The results of the random effect regression regarding the deposit interest rate show that there is
no significant relationship between the deposit interest rate and total deposits of commercial
bank. As shown in Table 4, the regression coefficient of deposit interest rate was −5.216579 with a
significance value of 0.459. This result indicates that when the deposit interest rate changes by
1%, total deposits of sampled private commercial banks decreased by 5.216579 in opposite
direction. As indicated by previous researchers, the deposit interest rate is considered as a main
variable in determining the total deposits of commercial banks. However, insignificance of the
deposit interest rate for sampled private commercial bank deposit is a controversial result with the
previous study and against the reality of saving theory.

On the other hand, the authors Fry (1994) and Brooks (1991) reported a negative relationship
between the interest rate and the bank deposit. Furthermore, some empirical studies by Hassan
(2016), Gragn (2015) and Fisseha (2017) also found that the deposit interest rate has a negative
relationship with bank deposit, so this study result in terms of negative sign is consistent with
those researchers' findings; however, this negative insignificant association between the total
deposit and the deposit interest rate contradicts with the assumption of permanent income
theory, which states that an increase in interest rate has a direct impact on income, meaning
that the people save because of future return expectation. The result is different from the research
of Harald & Heiko (2009), Sudin & Wan (2006) and Mashamba & Gumbo (2014).

4.4.3. Loan to deposit ratio

Regarding the impact of the loan to deposit ratio (LTDR) on total deposit, the estimated coefficient for
the loan to deposit ratio is statistically significant and negative for all sampled private commercial
banks at the 5% significance level. LTDR has a coefficient of −1.998126 and a p-value of 0.002. The
result indicates that when the loan to deposit ratio increased by one birr, the total deposit of the
sampled private commercial bank would decrease by 1.998126 units in opposite direction. This result
is also consistent with the empirical studies conducted in Ethiopia by Andinet (2016) and Bahiredin
(2016). However, this study is inconsistent with the study result of Mamo (2017) and Fisseha (2017).
Generally, depending on the study results, the high liquidity position of the private commercial bank
shows that the banks have higher secured money in their account, which also creates a low level of
deposit mobilization specifically for the coming life of the bank.

4.4.4. Profitability
For the purpose of the study, ROA is used as a proxy for profitability. The regression result of the
random effect model of this study shows that return on asset was found to have a negative
relationship with private commercial bank deposit, but the relationship is significant according to

Page 10 of 15
Dame Tafa & Tessema Worku, Cogent Economics & Finance (2022), 10: 2098608
https://doi.org/10.1080/23322039.2022.2098608

the model in table 4. The negative sign of the coefficient indicates that an increase in profit leads
to a decrease in private commercial bank deposit. Thus, the hypothesis is not in agreement with
the actual regression result and then hypothesis is rejected.

The negative effect of this variable could be due to the fact that as the profitability of the private
commercial banks increased, they decrease or minimize their reliance on deposit, and the other
reason is that when the banks generate high profitability, banks paid profit amounts as the
dividend rather than using them for the purpose of depositor’s attraction by giving gifts, advertis­
ing their services to customers; in another way, when banks are at a higher level of profitability or
financial performance, they are dominated by overconfidence regarding their ability to live long
year in the market or competition and then because of overconfidence, that banks may not use the
bank’s profitability or financial performance for additional deposit attraction. The negative sign of
this study finding is consistent with the empirical finding) and (Harald & Heiko (2009). Thus, the
conclusion about the effect of profitability on private commercial bank deposit remains ambiguous
and further research is required.

4.4.5. Individual foreign remittance growth rate

A regression result indicates that individual foreign remittance growth is found to be negatively
and insignificantly correlated with commercial bank deposit. Accordingly, it was hypothesized in
the last section that individual foreign remittance growth has a negative relationship with total
deposits of private commercial banks in Ethiopia. Hence, in line with the expectation, remittance
growth has a negative but insignificant relationship with bank deposit. This shows that individual
foreign remittance does not determine deposits of private commercial banks in Ethiopia.

Evidently, there are two arguments on the impact of remittance on bank deposit; First, the
remittance helps to increase the private savings as well as the amount of bank deposit growth, but
another parallel line disagrees on this and gives evidence that especially in developing countries,
with remittance only spending on the consumption, it is not use on the growth of bank deposit
conditions of the nation. Here, this study also supports this second view, because in our country
Ethiopia, a high percentage of remittance is spent on the basic consumption needs (food, clothing
and housing), non-productive investments and repayment of debts. Therefore, due to reality that a
significant part of remittances utilized in that way, are transferred from out of the country to home
country (Ethiopia) is without commercial banks intermediation and that these kinds of expendi­
tures and movement of money tends to makes the deposit level is low. This is also consistent with
the finding that long-run remittance growth in Ethiopia has a negative impact on economic growth
as well as on banking sector development through bank deposit mobilization (Tassew &
Nandeeswar, 2016). Moreover, Peter & Charles (2014) argue that remittances adversely affect
financial sector development since these capital flows are informal, altruistic and purposely
intended for household consumption. It is also inconsistent with the study result of Shemsu
(2015) in Ethiopia and Yéro (2010) in SSA.

In general, depending on the regression result, we have concluded that foreign remittance
growth has no statistical significant impact on the bank deposit and the transferred funds can
have a negative relationship with financial institutions (with private commercial banks) total
deposit, and when these funds are not deposited in financial institutions (the money circulated
through unofficial ways), it will discourage these institutions to expand their deposit mobilization
activities and poor bank financial performance.

4.4.6. Economic growth (GP)

The panel random effect estimation result given in Table 4 shows that the coefficient of change in
economic growth (GDP) rate is 7.803967 and the P-value is 0.005. This implies that there is a
significant positive relationship between GDP and total deposits of sampled private commercial
banks in Ethiopia. A regression coefficient of 7.803967 means that taking other independent
variables constant, a 1% increase in GDP (economic growth) results in a 7.803967-unit increase

Page 11 of 15
Dame Tafa & Tessema Worku, Cogent Economics & Finance (2022), 10: 2098608
https://doi.org/10.1080/23322039.2022.2098608

in commercial bank deposits. On the other hand, economic growth has a high coefficient next to
the unemployment rate, which states that there is a strong positive relationship between GDP and
bank deposit. Therefore, hypothesis 6 is accepted, stating that there is a positive relationship
between economic growth (GDP) and deposit amount of private commercial banks in Ethiopia.
This finding is consistent with the life cycle theory and permanent income assumption theory,
which shows that when income is high, people will be more likely to save, and when income is
little, they will be less likely to save, which means that ability to save by individual customers and
amount of deposit required to mobilize by banks are directly influenced by economic growth of the
country. The empirical result obtained from the regression of this study is in line with the empirical
result obtained by previous researchers (Hassan, 2016), and during periods of good economic
condition, loan demand tends to be higher, allowing banks to provide more loans, which made
commercial banks to mobilize high deposit. This study result suggested that GDP has a positive
relationship with commercial bank deposits. Demirguc & Hizinga (1999) shows that rapid economic
growth increases income of individuals; in fact, this deposit will be increased for a large number of
banks (Ayele, 2016). Economic growth causes private savings in Ethiopia, which is in line with
Keynesian theory; it is higher economic growth that leads to higher saving. Totally, theoretical,
previous empirical evidence and our finding suggest that economic growth is the main source of
bank deposit growth. In general, it concludes that sustainable economic growth of the country
facilitates banking deposits, activities and banks' financial performances.

4.4.7. Unemployment rate

Besides, from macroeconomic factors, 'the unemployment rate had a negative impact on total
deposits of sampled private commercial banks in Ethiopia by having a coefficient of −13.66136
and a p-value of 0.000, which indicates that a 1% change (increase/decrease) unemployment
rate can result in a change in total deposit of sampled private commercial banks by 13.66136 in
opposite direction. Therefore, the regression result is consistent with the hypothesis developed in
the study. Based on the result, the researchers accept the hypothesis and it can be concluded
that the unemployment rate had a negative and significant effect on deposits of sampled private
commercial banks.

The negative relationship between the unemployment rate and bank deposits could be attrib­
uted to the fact that the unemployment rate increases the cost of living and decreases the
individual income. Then, the customers/depositors want to forgo current savings, and this condi­
tion also decreases the amount of deposits of the bank. In other cases, the regression result of this
study regarding the effect of the unemployment rate on commercial bank deposit is similar to
empirical evidences by Serneels (2004) in Ethiopia. The researcher says “a negative relationship
between unemployment rate and the country’s economy indicates that high unemployment rate
in the given country directly reduce the individuals saving rate (amount)”, depending on this
reality, when the individual or depositors saving amount comes down, the bank deposit growth
amount also declined.

Therefore, the significant effect of the unemployment rate on the total deposit was also con­
sistent with the finding of Lomuto (2008) in Kenya and El (2017) in Morocco. In general, the
significant and negative effect of the unemployment rate shows that when there is a high
unemployment rate in Ethiopia, the level of income distributed to individual customers is very
low and most unemployed people also depend on the families, or in other words, it also creates
the opportunity to decrease individual saving or deposit this situation, which also directly reduces
the amount of deposit in the banking industry.

5. Conclusions
Based on the major findings derived in this study, researchers arrived at the following conclusions:
as observed from descriptive statistics and random effect model regression result, the number of
bank branches is positively and statistically significant to private commercial bank deposit. This

Page 12 of 15
Dame Tafa & Tessema Worku, Cogent Economics & Finance (2022), 10: 2098608
https://doi.org/10.1080/23322039.2022.2098608

indicates that the bank that has a large number of branches and aggressively expands its branches
in the unbanked and remote area generates a more amount of deposit.

The results also showed that insignificant and negative association exists between the
deposit interest rate and bank deposit. The negative effect of the deposit interest rate on
sampled private commercial bank deposit is a controversial result and against the saving
behavior theories. The insignificance of this variable is due to the fact that in Ethiopia, there
is no competition between banks to attract depositors by interest rate on deposit and in
Ethiopia, customers of banks are not attracted by the deposit interest rate, rather they are
motivated by other factors such as banks service quality, safety, differentiation of products
offered by bank and usual beliefs that private commercial banks will be not bankrupted or
liquidated; in other words, the level of awareness created by bank might attract depositors to
deposits their income into private commercial banks. Moreover, in Ethiopia, for consistent year
deposit, the interest rate is constant and very low when compared with the loan interest rate
and government regulation, and restriction on deposit interest rate and government involve­
ment in the market is very high in Ethiopia, because of this and other factors, there is no high
competition between private commercial banks in terms of interest rate on deposit for the
purpose of deposit mobilization.

Growth domestic product has a positive significant relationship with private commercial bank
deposit. This implies that the variable significantly and positively affects deposits of private
commercial banks because economic growth of any country directly or indirectly affects the saving
level of individual.

The unemployment rate has a significant and negative effect on the total deposits of sampled
private commercial banks. Therefore, this indicated that Ethiopian private commercial banks are
highly affected by the unemployment rate in the country. In general, it implies that private
commercial bank deposit decreases as the unemployment rate increases in the country. This is
because the amount and level of bank deposit mobilization directly depend on deposits from
individual customers.

6. Recommendations
Since the major source of resources for all commercial banks is deposit, banks should give necessary
attention to its deposits and its determinant factors (Table 1). Banks take a remedial action periodi­
cally for those influential factors that affect bank deposit. All private commercial banks should be
expanding their branch relatively with public commercial bank (commercial bank of Ethiopia) and
open a new branch around the rural areas of the country, specifically in unbanked areas.

As the regression result reveals, economic growth is the most important factor for the
growth of private commercial bank deposit, so that the government body (policy maker)
required giving more attention to improve the sustainable economic growth of the country.
An increasing in earning capacity of the people is expected to enhance their ability to deposit,
which leads to enhancement in the deposit growth of the bank; hence, this expectation is
changed in reality when the government body properly works on the way of reducing countries'
unemployment rate and when the government body create's the job opportunities to unem­
ployed people in the countries. So it is better that government body gives more attention on
the unemployment rate reduction and increment of the employed people, creating entrepre­
neur opportunity within Ethiopia.

Funding E-mail: [email protected]

1
The authors received no direct funding for this research. Department of Accounting and Finance, Salale
University, College of Business & Economics, Fitche,
Author details Ethiopia.
2
Meseret Dame Tafa1 Department of Economics, Salale University, College of
Solomon Tessema Worku2 Business & Economics, Fitche, Ethiopia.

Page 13 of 15
Dame Tafa & Tessema Worku, Cogent Economics & Finance (2022), 10: 2098608
https://doi.org/10.1080/23322039.2022.2098608

Disclosure statement Mamo, E. (2017). An investigation of determinants of

No potential conflict of interest was reported by the deposit mobilization in commercial banks of
author(s). Ethiopia. Research on Humanities and Social
Sciences 2224-5766(paper) 2225-0484(online), 7
Citation information (19), 55–63.
Cite this article as: Determinants of private commercial Mashamba, T., & Gumbo, L. (2014). Analysing the rela­
banks deposit in Ethiopia, Meseret Dame Tafa & Solomon tionship between banks’ deposit interest rate and
Tessema Worku, Cogent Economics & Finance (2022), 10: deposit mobilization: empirical evidence from
2098608. Zimbabwe commercial banks (1980-2006). Journals
of Business and Management 16 1 , 70–71.
References Mohammad, M. A., & Mansur, M. (2014 August 10). Do The
Andinet, F. A. (2016). Factors determining deposit mobi­ macroeconomic variables have any impact on Islamic
lization performance: In case of private commercial bank deposit? An application to the Malaysian market.
banks in Ethiopia. In degree of executive MA. Addis Kuala Lumpur, Malaysia.
Ababa University graduation thesis availableonline . Nathanael, O. E. (2014). Macroeconomic determinants of
Ayele, W. (2016). Determinants of private saving in bank deposit in Nigeria. Journal of Economics and
Ethiopia. degree of master of arts in applied eco­ Sustainable Development 2222-1700(Paper) 2222-
nomic modeling and forecasting Addis Ababa 2855(Online), 5(10, 2014), 49–56.
University. Otu, S. L., & Peter, L. A. (2015). Determinants of bank
Bahiredin, A. (2016). Determinants of commercial banks’ deposit in Ghana: A cointegration approach. Asian
deposit growth:(evidence from Ethiopia). degree of Journal of Economics and Empirical Research 2409-
masters of science (accounting and finance). Addis 2622, 2 (1), 1–6. 1-7
Ababa University. Peter, G. N., & Charles, K. G. (2014). Remittances as a
Brooks, C. (2004). Introductory economics for finance determinant of financial sector development. Journal
second edition. Cambridge University press. of Business, Economics & Finance , 3(4), 2146–7943.
Cooper, D., & Schindler, P. S. (2009). Business research Pham Minh Dat, N. D. (2020). Comparative China corpo­
methods 9 edition. Tata MCGRaw- hill. rate governance standards after financial Crisis.
Demirguc, K. A., & Hizinga, H. (1999). Determinants of Journal of Security and Sustainability Issues, 9(3), 7–
commercial bank interest margins and profitability: 8 doi:10.9770/jssi.2020.9.3(18).
some international evidence. World Bank Economic Saunders, L. M., & Thornhill, A. (2009). Research methods
Review, 13(2), 379–408. https://doi.org/10.1093/ for business students. education limited.
wber/13.2.379 Serneels, P. (2004). The nature of unemployment rate in
Dinh Tran Ngoc Huy, B. T. (2020). Impact of selected Ethiopia. CSAE WAPS.
factors on stock price: A case study of vietcom bank Shemsu, B. A. (2015). Determinants of commercial bank
in Vietnam. Entrepreneurship and Sustainability deposits in Ethiopia: A case of commercial bank of
Issues, 7(4), 14–15. Ethiopia. In degree of masters of science in account­
Dinh Tran Ngoc Huy, P. M. (2020, May). Building an ing and finance. Addis Ababa University.
econometric model of selected factors’ impact on Simon-Oke, O. O., & Jolaosho, O. M. (2013, June). Real
stock price. Journal of Security and Sustainability interest rate and savings mobilization in NIGERIA.
Issues, 9, 14–15 May doi:10.9770/jssi.2020.9M(7). International Journal of Development and Economic
El, F. M. (2017). Determinants of bank deposits in Morocco. Sustainability, 1(2), 28–40. 28-38.
https://mpra.ub.uni-muenchen.de/79075/ MPRA Paper Sudin, H., & Wan, N. (2006). Deposit determinants of
No. 79075, posted 12 May 2017 06:05 UTC, 2-6. commercial banks in Malaysia.
Fisseha, T. (2017). Determinants of commercial banks Tassew, T. D., & Nandeeswar, R. (2016). The impact of
deposit in Ethiopia. degree of masters science in remittances on economic growth in Ethiopia. Indian
accounting and finance. Journal of Commerce & Management Studies 2249-
Garedachew, W. (2008). Electronics banking in Ethiopia- 0310 E 2229-5674 VII 2 , 1–12.
practice, opportunities and challenges journal of inter­ Tizita, G. (2014). Determinants of private saving in Ethiopia.
netbankingandcommerce . 12(5), 331–335. https://doi. degree of maters theses, Arbaminch University.
org/10.1016/j.canrad.2008.02.003 Viswanadham, P., Yirgalem, T., & Medanit, B. (2013). The
Gebeyew, R. (2013). The role of saving and loan in eco­ effect of location and information technology on
nomic growth of Ethiopia. Proceedings of the national banks deposit mobilization status in Ethiopia:
conference on loan and saving: the role in EThiopian Empirical evidence on private commercial banks in
socio-economic development held 15-16 February Adama town. International Journal of Science and
2013 (p. 74). Harar: Haramaya university. Research (IJSR) (Online), 4 12 , 616–619.
Giragn, G. (2015). Determinants of deposit mobilization Woldegiorgis, T. (2010). Domestic resource mobilization in
and related costs of commercial banks in Ethiopia. Sub Saharan Africa: the case of Ethiopia. Addis Ababa
Addis Ababa University. degree of executive masters university,Ethiopia. Nourth-south institute. L.institute
of business administration Nord-sud
Hair, J. F., Tatham, R. L., Andeson, R. E., & Black, W. C. Yéro, B. (2010). The Impact of remittances and foreign aid
(2006). Multivariate data analysis. prentice Hall. on savings/investment in Sub-Saharan Africa (SSA).
Harald, F., & Heiko, H. (2009). Lebanon- determinants of In Laboratory of economic analysis and prospective
commercial bank deposits in a regional center. IMF. (LAPE). University of Limoges, France.
Hassan, M. O. (2016). Effect of interest rate on commer­ Yonas, M., Arega, S., & Anteneh, G. (2013). Health check-up
cial bank deposits in Nigeria (200-2013). Proceeding of commercial banks in Ethiopia. Proceedings of a con­
of the first American academic research conference ference on ‘loan and saving: the role in Ethiopian socio-
on global business, economics, finance and Social economic development’ (p. 45). Haramay university.
sciences (AAR16 New York conference) 978-1-943 Yusuf, S. (2001). Determinants of bank savings mobiliza­
(pp. 11–12). New York: USA. tion: The case of CRDB bank limited. Degree of mas­
Lomuto, K. J. (2008). Determinants of Kenyan commercial ters of Business Adiministration (finance and
banks deposits growth. University of Nairobi. Banking) IDM, Mzumbe.

Page 14 of 15
Dame Tafa & Tessema Worku, Cogent Economics & Finance (2022), 10: 2098608
https://doi.org/10.1080/23322039.2022.2098608

© 2022 The Author(s). This open access article is distributed under a Creative Commons Attribution (CC-BY) 4.0 license.
You are free to:
Share — copy and redistribute the material in any medium or format.
Adapt — remix, transform, and build upon the material for any purpose, even commercially.
The licensor cannot revoke these freedoms as long as you follow the license terms.
Under the following terms:
Attribution — You must give appropriate credit, provide a link to the license, and indicate if changes were made.
You may do so in any reasonable manner, but not in any way that suggests the licensor endorses you or your use.
No additional restrictions
You may not apply legal terms or technological measures that legally restrict others from doing anything the license permits.

Cogent Economics & Finance (ISSN: 2332-2039) is published by Cogent OA, part of Taylor & Francis Group.
Publishing with Cogent OA ensures:
• Immediate, universal access to your article on publication
• High visibility and discoverability via the Cogent OA website as well as Taylor & Francis Online
• Download and citation statistics for your article
• Rapid online publication
• Input from, and dialog with, expert editors and editorial boards
• Retention of full copyright of your article
• Guaranteed legacy preservation of your article
• Discounts and waivers for authors in developing regions
Submit your manuscript to a Cogent OA journal at www.CogentOA.com

Page 15 of 15