Determinants of Deposit Mobilization in Private Commercial Banks; The case of west Shewa Zone Oromia Regional State, Ethiopia

Abstract

Deposit is one of the resources commercial banks highly motivated to mobilize and the most liquid money that is found in the treasury of the bank and which is ready to be borrowed in need of the fund. Many private banks were not effective in controlling and managing deposit because of variation in management strategies and others determinants that can affect their deposit. To achieve the research objective, the study was adopted mixed data approach (qualitative and quantitative) method through primary and secondary data sources. Based on purposive sampling method used to assemble primary data from twelve branches which incorporating 48 employees in west showa zone who were selected to response the questionnaires. While the secondary sources of data would be extract from annual reports of 12 west showa zone private commercial bank branches, the data years of 2016-2021G.C. The researcher proceeds as the factors that effect of deposit mobilization of private commercial banks were, deposit mobilization strategy, branch expansion, saving rate, lending rate, use of modern technology, competition of state banks, availability of local infrastructures and investment and current NBE directives. Those paper was empirically examined the determinants of private commercial banks deposit mobilization in Ethiopia. The data was analyzed using SPSS version 26. The results of the model shows that, Deposit mobilization Strategy, Competitive with state bank, branch expansion, use of modern technology, saving rate and lending rate and coved 19 prevention and control were significantly affecting the deposit mobilization of private commercial banks of west Shewa zone Oromia regional state. Increase deposit mobilization strategy, competitive with state banks, branch expansion, and saving rate increases the deposit of private commercial banks whereas increasing lending rate, inappropriate use of modern technology and coved 19 prevention and control decrease deposit mobilization of private commercial banks. As a result, the study recommended that, Private commercial banks should play a key role in encouragement increase deposit mobilization strategy, branch expansion, saving rate, competition with state banks and decrease inappropriate use of modern technology, lending rate to increase their deposit mobilization.