Factors Determining Deposit Mobilization and Performance in Ethiopian Private Commercial Banks

Abstract This study aims to identify the Factors Determining Deposit Mobilization and Performance in Ethiopian private commercial Banks. The study will try to answer research question like How do internal factors such as interest rates, branch expansion, and customer service influence deposit mobilization performance, What role do external factors like economic conditions and regulatory policies play in deposit mobilization, what are the major challenges faced by private commercial banks in mobilizing deposits and how do customers' perceptions and preferences influence their deposit decisions. The study had found variables that can affect the total deposits of the banks. Seven variables are regressed with the dependent variable i.e. total deposit. The explanatory variables are number of bank branches, deposit interest rate, liquid asset to deposit ratio, lagged value of bank deposits, net interest margin, inflation rate and economic growth (GDP). The study was used secondary source of data for data collection, The data for these variables were collected from the respective private commercial banks’ financial statements, national bank of Ethiopia, central statistical authority and MOFEC of the sample year 2014 up to 2021. The researcher was used a quantitative research approach and explanatory research design to see the regression result analysis with respective empirical literature on the determinants of bank deposits. Quantitative data means that identifying by number, present and table. And explanatory research design examines the cause-and-effect relationships between dependent and independent variables. The study was adapted judgmental sampling for the selection of respondents of the organization. After the requirement data have been collect from primary and secondary source of data an appropriate analysis was made by using of descriptive statics. The study suggests that Ethiopian Private commercial banks need to improve deposit mobilization by paying more attention to internal factors controlled by management. This study provides useful insights for bank managers, owners, analysts, policymakers, depositors, and other stakeholders on the deposit growth of Private commercial banks and its determinants.