Abstract:
The purpose of this study is to determine the factors affecting resource mobilization in
Commercial Banks of Ethiopia in case of Burayu town. In order to achieve this objective
descriptive and econometric analyses were performed. The target populations of the research
were the customer of Commercial Banks of Ethiopia found in Burayu town. Accordingly, from
total commercial banks found in Burayu town four commercial banks were purposively selected
for this study. The primary and secondary data was used to collect the data from the customers
of commercial banks found in Burayu town. Multiple regression models was used to analyses the
data. The dependent variable used in this study was Deposit Mobilization. The explanatory
variables used in this study were personal income, service Excellency, Banks accessibility,
interest rate, exchange rate, inflation, liquidity problem, fund transfer and withdrawal limit.
Different diagnostic tests namely test for zero mean of error terms; homoscedasticity,
nomulticollinearity and normality were conducted to check the appropriateness of the model.
The diagnostic results show that none of the classical linear regression model assumption is
violated. To determine the effects of the independent variables on the dependent variable
regression was used .The results show that service quality, Bank accessibility, personal income,
interest rate and withdrawal limit have positive effect on resource mobilization of the banks. But
exchange rate, inflation, liquidity problem and fund transfer limit has negative effect on
commercial banks’ deposit growth. Thus, based on the findings the study suggests that
commercial banks of Ethiopia should improve service quality specially reduce the waiting time
and continue expand the branches to get huge non-banking customers living in rural area and
they can collect more resource.
