The Effects of Prize Linked Saving Program On Resource Mobilization in Commercial Bank of Ethiopia Dire Dawa District

This study aimed to determine the effect of prize linked saving program on resource mobilization in commercial bank of Ethiopia Dire Dawa district. The study also takes into consideration other control variables that are bank specific (bank branch, deposit interest rate loan to deposit ratio and return on asset) and macroeconomic factors (inflation and gross domestic product). To undertake the study the researcher used a time series data from 2000 to 2019. The study deployed Auto Regressive Distributive Lag (ARDL) model to estimate the research variables. The result of the study shows that prize linked saving program, gross domestic product and bank branch has a significant positive effect on total private deposit in CBE Dire Dawa district. Loan to deposit ratio has a significant negative effect on total private deposit. The other remaining variables like inflation, deposit interest rate, return on asset has no significant effect on total private deposit. The study recommends that CBE has to implement policy that increase the PLS program to two or more and to decrease the amount of deposit to enable low income customers to get prize coupon. The other recommendation forwarded by the researcher was to make sound advertisement about PLS program especially to the rural community and to increase its number of branch to better access the community and collect enormous financial resources.