Factors Affecting Deposit Mobilization in 3 Private Banks

‫دمسي درخ‬
A COMPARATIVE ANALYSIS ON CHALLENGES AND

OPPORTUNITIES OF DEPOSIT MOBILIZATION OF
AWASH AND COOPERATIVE BANKS:
THE CASE OF ADAMA CITY
By
DEREJE DEMISSIE SHASHO (M. Sc.)
January, 2022
ADDIS ABABA, Ethiopia
RESUMÉ, CV
A: Personal Identification
Name: Dereje Demissie Shasho

Age: 50 Years
Sex: Male
Date of Birth: February 08, 1973
Place of Birth: Ligeba, Lode Hetosa, Arsi Zone, Ethiopia
Marital Status: Bachelor
Health Status: Excellent
Nationality: Ethiopian
Address: Arsi Robe town, Arsi Zone, Ethiopia
Mobile Phone: +251922304635
Email address: esandemissie@gmail.com
B: Educational History
S. N. Level Name of University/school Year of attendance Awards
1 Postgraduate SGS, AAU Sep. 1995-jan. 1999 M.Sc degree
2 Undergraduate Science Faculty, AAU Sep. 1989-Nov.6, 1993 B.Sc degree
3 Grade 12 Asella Comp. Sec. School Sep.1988-June 1989 Certificate
4 Grade 9-11 Huruta Senior Sec. School Sep. 1985-jun. 1988 Not Applicable
C: Work Experience
Employer organization Position Main Responsibilities Duration
Self-employed Consultant and - Undertaking research
Freelance Worker works in collaboration with
the principal investigators
- Supervising the activities
of investigation being
undertaken, July 1, 2007-
Present
- Assisting in designing
database and analyzing
collected data,
- Assisting in writing up of
the research report,
ii
- etc
Rehoboth Medical - Instructing students taking Apr. 2006- Jun.
College different ICT course works 2006
related practices
Chilalo University DEAN, Academic - Administrative activities Nov. 2003-Feb.
College Dean and Instructor - Managerial functions 2004
- Instructing courses
- Advising students
Jimma Teachers’ - Lecturer - Instructing courses Sep. 1, 2000- Feb.
College - Advising students 29, 2002
- Supervising laboratory
works
- Conducting action and
applied research works
- Attending educational
seminars and workshops as
well as other conferences
offered by experts
- Invigilating examinations
- Marking examination
papers of distance and
extension program students
- Giving tutorial sessions for
distance students as per the
time table of the college
and/or MOE
Bahir Dar Teachers’ - Lecturer - Instructing courses Dec. 1, 1993 – Sep.
College - Assistant - Advising students 30. 1999
lecturer - Supervising laboratory
- Graduate works
Assistant - Conducting action and
applied research works
- Invigilating examinations
- Facilitating and guiding
laboratory works
- Marking laboratory reports
of students
- Setting equipments,
materials and reagents
enquired for the practical
sessions
- Attending educational
seminars and workshops as
well as other conferences
offered by experts
D: Qualification Areas
Area of experience &
Examples of expertise and qualification
qualification
Sanitation - Basics of the sanitation science principles, guidelines and
recommendations developed and implemented by WHO and UN
iii
member countries
- Assessing sanitation status of communities and prioritizing
promotion and interventional areas
Personal Hygiene - Basics of the personal hygiene principles, guidelines and
member countries
- Assessing personal hygiene status of individuals and food
handlers in urban and rural settings as well as food and drinking
establishments and prioritizing promotion and interventional areas
Public Health - Basics of the public health related principles, guidelines and
member countries
- Assessing personal public health related problems and practices,
attitudes and knowledge of individuals and HHs in urban and
rural settings and prioritizing promotion and interventional areas
Human Retrovirology - HIV culturing, phenotyping, sequencing and related issues
- Molecular biology of HIV-1 isolates, HMA, PCR, NASBA, etc
Immunology - Five differential, coulter counting, PBMC isolation and storage,
FASCan assays, etc
Serology - ELISA, WESTERN- AND Southern blotting, Agglutination and
many others
Microbiology - Almost all laboratory techniques and theoretical principles
E: Computer Related Skills and Knowledge

Area name Skills and Examples of are if relevant
Competenci
es
Microsoft Word Excellent Processing, editing, writing, etc
Microsoft Excel Excellent Creating; entering, exporting, analyzing, etc of data;
producing reports;
Microsoft Access Excellent Creating and designing charts; entering, analyzing and
editing data, etc
Microsoft Publisher Excellent
Microsoft PowerPoint Excellent Creating lecture notes, presentation of research works, etc
Utility software Very good SPSS, IBM SPSS21, Stata Version 8 to Version 12,
Harvard Graphics, Epi-Info version 5 to version 7 and some
others
Programming Good C++, Visual, Visual C+, Visual C++, Java, etc
languages
F: Language Skills
Language type Skills

Reading Writing Speaking Understanding
English Excellent Excellent Very good Excellent
Afaan Oromo Excellent Excellent Excellent Excellent
Amharic Excellent Very good Excellent Excellent
G: Publications
I: Published
iv
[1]. HIV-1 Subtype C Syncytium- and Non-Syncytium-Inducing Phenotypes and Co-Receptor

Usage Among Ethiopian Patients with AIDS. AIDS, 1999; 13(11):1305-1311.
II: Unpublished- I have undertaken and produced some articles listed below only as examples
[1]. Retrospective Evaluation of Ceftriaxone Utilization in Inpatient Wards at Asella Referral and
Teaching Hospital, Central Ethiopia
[2]. Metronidazole Injection Use Evaluation in Inpatient Wards at Asella Referral and Teaching
Hospital, Central Ethiopia
[3]. Assessment of Preference of Pregnant Women for Place of Delivery and Factors Associated
with Institutional Delivery among Ante Natal Care (ANC) Service Attending Women at
Asella Town in Governmental Institutions, Central Ethiopia
[4]. Pregnant Women Preference of Place of Delivery and Factors Associated with Institutional
Delivery among ANC Attending Women at Asella town Governmental Health Facilities
[5]. Magnitude, Factors Associated with Successful Vaginal Birth after Cesarean Section and Its
Outcomes in Bishoftu General Hospital, Ethiopia
[6]. Assessment of the Magnitudes and Correlates of Anemia among Pregnant Women Attending
Antenatal Care Service Clinics in Robe Didea Hospital, Southeastern Ethiopia
[7]. Mechanical Ventilation Weaning Outcomes and Associated Factors among Patients Admitted
to Adult Intensive Care Unit of Governmental Hospitals, Addis Ababa, Ethiopia: Cross-
Sectional Retrospective Study Design
[8]. Assessment of Determinants of Client Satisfaction with Quality of Nursing Care among
Patients Admitted to Adults Ward in Adama Hospital
[9]. Prevalence of Undernutrition and Associated Factors among Family Planning Attendants in
Asella Town Governmental Health Institution, Central Ethiopia
[10]. Prevalence of Protein Energy Malnutrition (PEM) Among Children Six Months to Five Years
of Age in Bilalo Town, Arsi Zone, Ethiopia
[11]. Determinants of Utilization of Integrated Community Case Management Services for
Childhood Illnesses among Mothers in Hetosa Woreda, Arsi Zone
[12]. Prevalence of Undernutrition and Associated Factors among Adult Tuberculosis Patients in
Asella Hospital and Surrounding Health Facilities, Central Ethiopia
[13]. Peoples’ Attitude towards Using Family Planning Methods: The Case Study of Sire Town,
Central Ethiopia
[14]. Knowledge, Attitudes and Practices of Family Planning Methods among Pregnant Mothers
Attending ANC Clinic at Arsi Robe Health Center, South East Ethiopia
[15]. Knowledge, Attitudes and Practices of Mothers towards Prevention and Control of Childhood
Diarrheal Diseases in Gonde Town, Central Ethiopia
[16]. And many others that I could present upon request.
H: Referees
v
1. Prof. Endashaw Bekele (PhD); AAU, Department of Biology, Tel.: +251947407077.

2. Prof. Yalemtsehay Mekonnen (PhD), AAU, Dept. of Biology, Tel.: +251913244396.
3. Prof. Amare Gessesse (PhD), AAU, Dept. of Biology, Tel.: +251911146855.
4. Dr. Dawit Abate (PhD); AAU, Department of Biology, Tel.: +25111114250.
5. Prof. Beyene Petros (PhD); AAU, Department of Biology, Tel.: +25111114250.
vi
ACKNOWLEDGEMENTS
I would like to extend my special thanks go to Adama city branch managers and employees
of AB S.C. and CBO S.C. for their support and kindly provision of preliminary data on the
numbers of employees of their corresponding branches and names of the branches operating
in the city in this fiscal year participants of the study for their provision of responses for the
administered questionnaire.
Last but not least, my special acknowledgements and heartedly thanks should go to Ato
Mekibinnan Demissie for his assistance and help in my endeavor in writing up this research
work, data analyses and grammatical errors corrections.
vii
TABLE OF CONTENTS
RESUMÉ, CV ............................................................................. Error! Bookmark not defined.

ACKNOWLEDGEMENTS ..................................................................................................... i
ABBREVIATIONS AND ACRONYMS ............................................................................... xi
LIST OF TABLES .................................................................................................................xii
LIST OF FIGURES .............................................................................................................. xiv
ABSTRACT ............................................................................................................................ xv
CHAPTER ONE ...................................................................................................................... 1
1: INTRODUCTION ............................................................................................................... 1
1.1. Background of the study.................................................................................................. 1
1.2. Statement of the problem ................................................................................................ 4
1.3. Major Research Questions .............................................................................................. 9
1.4. Objectives of the Study ................................................................................................... 9
1.4.1 General Objective ...................................................................................................... 9
1.4.2. Specific Objectives ................................................................................................... 9
1.5. Significance of the study ................................................................................................. 9
1.6. Scope of the study ......................................................................................................... 10
1.7. Limitations of the Study ................................................................................................ 11
1.8. Study Area and Population ............................................................................................ 11
1.9. Operational Definitions of Key Terms .......................................................................... 12
1.10. Organization of the Research work ............................................................................. 13
CHAPTER TWO ................................................................................................................... 14
2: REVIEW OF RELATED LITERATURE ...................................................................... 14
2.1. Theoretical Review ....................................................................................................... 14
2.1.1. Deposit Mobilization .............................................................................................. 14
2.1.2 Major Types of Deposit products or Accounts ........................................................ 15
2.1.3. Overview of Challenges and Opportunities of Deposit Mobilization .................... 17
2.2. Empirical Review of Relevant Literature...................................................................... 21
2.3. Knowledge Gaps ........................................................................................................... 27
2.4. Conceptual Framework and Hyporesearch work of the study ...................................... 28
2.4.1. Conceptual Framework........................................................................................... 28
2.4.2. Hyporesearch work of the study ............................................................................. 30
CHAPTER THREE ............................................................................................................... 31
viii
3: RESEARCH METHODOLOGY ..................................................................................... 31

3.0. Introduction ................................................................................................................... 31
3.1. Research Methodology, Approach and Design ............................................................. 31
3.2. Types and Sources of Data ............................................................................................ 32
3.3. Population, Sampling Techniques and Sample Sizes.................................................... 32
3.3.1. Study Population..................................................................................................... 32
3.3.2. Sampling Techniques ............................................................................................. 33
3.3.3. Sample Size Determination .................................................................................... 33
3.4. Variables of the study.................................................................................................... 35
3.4.1. Dependent Variables............................................................................................... 35
3.4.2. Independent Variables ............................................................................................ 35
3.5. Data Collection Instruments .......................................................................................... 35
3.6. Validity and Reliability of the Research Instruments ................................................... 36
3.7. Data Analysis Techniques ............................................................................................. 37
3.8. Ethical considerations ................................................................................................... 37
CHAPTER FOUR .................................................................................................................. 39
4: DATA ANALYSES, PRESENTATION AND INTERPRETATIONS ......................... 39
4.0. Introduction ..................................................................................................................... 39
4.1. Response Rate of the Study ........................................................................................... 39
4.2. Socio-demographic Characteristics of Respondents ..................................................... 39
4.3. Amounts and Levels of Mobilized Deposits by the Types and Banks.......................... 43
4.4. Descriptive Statistics of Dependent and Independent Variables .................................. 46
4.4.1. Some Factors Affecting Deposit Mobilization ....................................................... 46
4.4.2. Service Quality and Its Effects ............................................................................... 64
4.4.3. Branch Expansion and Its Effects........................................................................... 65
4.4.4. Interest Rates and Its Effects .................................................................................. 67
4.4.5. Technological Usage and Its Impacts ..................................................................... 69
4.4.6. Disposable Income or Economic Growth ............................................................... 71
4.4.7. Market Study and Marketing Strategies’ Influences .............................................. 72
4.5. Associations between Dependent and Independent variables of Study ........................ 74
CHAPTER FIVE ................................................................................................................... 81
5: SUMMARY, CONCLUSIONS AND RECOMMENDATIONS ................................... 81
5.0. Introduction ..................................................................................................................... 81
5.1. Summary of Major Findings ......................................................................................... 81
ix
5.2. Conclusions ................................................................................................................... 85

5.3. Recommendations ......................................................................................................... 87
6: REFERENCES .................................................................................................................. 90
7: APPENDIX....................................................................................................................... 100
7.1. Appendix II: Semi-Structured Questionnaires ............................................................ 100
x
ABBREVIATIONS AND ACRONYMS
ADR Age Dependency Ratio

AB Awash Bank (S.C)
ATMs Automated Teller Machines
CBE Commercial Bank of Ethiopia
CBO Cooperative Bank of Oromia (S.C)
CSA Central Statistical Authority
DBE Development Bank of Ethiopia
GDP Gross domestic product
IT Information technology
LIQUIDITY Liquidity of Awash and Oromia Cooperative Banks
M+2 Money supply
NBE National Bank of Ethiopia
NCBs Nationalized Commercial Banks
NGO Non-governmental organization
PCI Per Capita Income
RVU Rift Valley University
SACCOs Saving and Credit Cooperatives
TB Treasury Bill
USD United States Dollar
xi
LIST OF TABLES
SN Tables Page
1 Table 3.1: Numbers of study participants and their corresponding sample sizes
35
for both banks’ branches and for overall branches in Adama City, 2020
2 Table 3.2: Parts of the instrument and their reliability per category and overall 37
3 Table 4.1: Socio-demographic features of the respondents of both banks’
39
branches in Adama city, 2020(94)
4 Table 4.2: Levels of deposit mobilization by banks’ branches in Adama city,
43
2020(94)
5 Table 4.3: Levels of deposits mobilized by the banks and types in Adama city,
43
2020(94)
6 Table 4.4: Means, standard deviations and standard errors of the means for
each types and total deposits mobilized by the two banks in Adama city, 45
2020(94)
7 Table 4.5: Levene’s test for equality of variances and t-test for equality of the
means for each types and total deposits mobilized by the two banks in Adama 45
city, 2020(94)
8 Table 4.6: Some factors affecting deposit mobilization by branches of Awash
46
and Oromia Cooperative Banks in Adama city, 2020(94)
9 Table 4.7: Main reason for the branch expansion for Awash and Oromia
Cooperative Banks in Adama city as a function of rank of total deposits 49
mobilized, 2020(94)
10 Table 4.8: Main reason for the branch expansion for Awash and Oromia
49
Cooperative Banks in Adama city as a function of type of banks, 2020(94)
11 Table 4.9: Other factors affecting deposit mobilization by branches of Awash
52
12 Table 4.10: Main factors and challenges affecting deposit volumes mobilized
by Awash and Oromia Cooperative Banks in Adama city as a function of type 57
of banks, 2020(94)
13 Table 4.11: Influences of service quality and its effects on deposit mobilization
63
of Awash and Oromia Cooperative Banks in Adama city, 2020(94)
14 Table 4.12: Influences of branch expansion and its effects on deposit
mobilization of Awash and Oromia Cooperative Banks in Adama city, 65
2020(94)
15 Table 4.13: Influences of interest rates and its effects on deposit mobilization
67
16 Table 4.14: Influences of technological usage and its impacts on deposit
2020(94)
17 Table 4.15: Influences of disposable income or economic growth on deposit
2020(94)
18 Table 4.16: Influences of market study and applying marketing strategies on
deposit mobilization of Awash and Oromia Cooperative Banks in Adama city, 72
2020(94)
19 Table 4.17: SPSS outputs for two-way analysis of variance (2-Way ANOVA)
for the two banks and their employees’ work experiences in years on the 74
weighted ranks of the total deposits mobilized by the branches of the banks in
xii
Adama city, 2020(94)

for the two banks and the most significant group of depositors of the banks on
75
the weighted ranks of the total deposits mobilized by the branches of the banks
in Adama city, 2020(94)
for the two banks and the numbers of branches the banks had on the weighted
76
ranks of the total deposits mobilized by the branches of the banks in Adama
city, 2020(94)
for the two banks and the cause for the difference in deposit mobilization
77
among the branches on the weighted ranks of the total deposits mobilized by
the branches of the banks in Adama city, 2020(94)
for the two banks and weighted provision of service quality on the weighted
78
ranks of the total deposits mobilized by the branches of the banks in Adama
city, 2020(94)
for the two banks and weighted market study and marketing strategies on the
78
for the two banks and weighted market study and marketing strategies on the
79
xiii
LIST OF FIGURES
SN Figures Page
1 Figure 2.1: Conceptual Framework of the Study for a comparative analysis on
the challenges and opportunities of deposit mobilization by both banks in 30
Adama city
2 Figure 4.1: Years of work experiences of the respondents in Adama city,
40
2020(94)
3 Figure 4.2: The respondents’ job title per bank type and in aggregate in Adama
41
city, 2020(94)
4 Figure 4.3: Respondents’ job title by bank type & in aggregate in Adama city,
42
2020(94)
5 Figure 4.4: Amounts and kinds of mobilized deposits by banks in Adama city,
46
2020(94)
6 Figure 4.5: Types of new deposit products offered by the banks in Adama city,
56
2020(94)
xiv
ABSTRACT
Deposit mobilization is a fundamental part of banking activity by which the public cash or
funds accumulation by the financial institutions via different routes such as savings, current
and fixed deposit accounts, and through other techniques such as the specialized schemes of
deposit mobilizations. Because, banks serve as an intermediary by collecting deposits from
depositors and disbursing loan to borrowers. Mobilizing good level of deposits to meet the
current demand for loan is critical that determines the level of performance. However, the
challenges and opportunities of deposit mobilization by Awash Bank (AB) SC and
Cooperative Bank of Oromia (CBO) SC were not systematically investigated and documented
yet and also their deposit mobilization levels, challenges and opportunities are not compared
and contrasted so far. Thus, the aim of this research work was to examine, and compare and
contrast the challenges and opportunities of deposit mobilization of Awash Bank (S.C) and
Cooperative Bank of Oromia (S.C) in Adama city. Descriptive method particularly survey
design approach was adopted for the study among 58 respondents of AB SC and 36
respondents of CBO SC that were selected using purposive, simple random and availability
sampling techniques working in 10 Adama city branches of AB SC and 11 Adama city
branches of the CBO SC. Reliability of the items of the instruments were verified using
Cronbach’s alpha and items with alpha values of greater than or equal 0.70 and higher were
considered reliable and was used for data collection. The survey will be conducted with staff
individuals working in Awash Bank S.C and Cooperative Bank of Oromia SC working at
different positions in Adama City using semi-structured questionnaire. Collected data was
analyzed using descriptive and inferential statistical methods of data analyses. Analyzed data
was presented using descriptive accounts, pictorial representations, tables, charts and verbal
description and accounts. Necessary ethical clearances were obtained from concerned bodies
and offices.
Findings of the study revealed that Awash Bank (S.C) was more effective and had better
levels of mobilizing deposits than its counterpart or the Cooperative Bank of Oromia (S.C).
There were several challenges and opportunities that faced the branches of both banks in
Adama city in their efforts of mobilizing deposits over the past three fiscal years’ panel. Some
of the challenges were similar for branches of both banks and the same held true in the case
of opportunities too but a few challenges and opportunities were peculiar to one of the banks
only. However, the findings of the study also showed that some opportunities of Awash Bank
(S.C) were the challenges of Cooperative Bank of Oromia (S.C) and the vice versa.
Based on the major findings of the study, the effectiveness, levels and amounts of mobilized
deposits, the challenges and opportunities of the branches of these banks significantly differ
in Adama city even though they shared some similar challenges and opportunities in their
endeavor to mobilize deposits. Thus, both banks’ branches have not mobilized adequate
amounts of deposits and to do so they must design and implement appropriate strategies to
tackle and overcome the effects of challenges they have faced.
Key Words: Deposit, deposit mobilization, challenges, opportunities, comparative analysis,

AB SC, CBO SC, Adama city, Ethiopia
xv
CHAPTER ONE
1: INTRODUCTION
1.1. Background of the study

Banks play a key role in improving economic efficiency by channeling funds from resource
surplus unit to those with better productive investment opportunities. Banks also play key
role in trade and payment system by significantly reducing transaction costs and increasing
convenience (NCA, 2006). In less monetized countries, like Ethiopia, whilst financial sector
is dominated by banking industry, effective and efficient functioning of the latter has
significant role in accelerating economic growth. Commercial and cooperative banks mainly
mobilize funds for short term and medium term purposes. To enhance the role of banks in an
economy, competition is an important driving force; without competition, it is improbable to
bring about efficiency and foster financial sector development. In other words, insufficient
banking services may result in substantial social losses on account of higher price, higher
transaction cost, lower credit supply, lack of innovation and poor service quality (Zerayehu,
2013).
Deposits, according to Aliyu (2010), are “funds that customers place with a bank which the
bank is obligated to repay on demand, after a specific period of time or after expiration of
some require.” Commercial banks are profitable financial institutions that provide funds to
customers who seek financing by collecting from those who have surplus fund. Lending more
money is possible if a bank has sufficient loanable fund. Hence, banks give due attention to
mobilize more deposits by making use of alternative techniques to attract customers such as
providing attractive interest rates, using good marketing strategy to meet the test &
preference of deposit customers, providing quality customer service, adopting latest
technology and working on branch expansion.
Selvaraj and Kumar (2015) state that, the success of the banking greatly lies on the deposit
mobilization. Performances of the bank depend on deposits, as the deposits are normally
considered as a cost effective source of working fund. Mobilization of rural savings is one of
the important objectives of the Commercial Banks. It helps to expand banking operations.
The successful functioning of commercial banks depends on the extent of funds mobilized.
Deposits are the life blood of banking companies. Deposits constitute a vital source of funds
required for banking business. There are different types of deposits, with different maturity
1
pattern carrying different rates of interests. Deposit mobilization is depending on the cost of
deposits. Mobilization of deposits for a bank is as essential as oxygen for human being.
According to Varman (2005), deposits are foundations upon which banks thrive and grow.
They are unique items on a bank’s balance sheet that distinguish them from other types of
business organizations. The ability of a bank’s management and staff to attract checking and
savings accounts from business and individuals is an important measure of the bank’s
acceptance by the public. Deposits provide most of the raw materials for bank loans and thus
represent the ultimate source of bank profits and growth. Deposits generate cash reserves, and
it is out of the excess cash reserves a bank holds, that new loans are created. Important
indicators of management effectiveness in any bank are whether or not deposited funds have
been raised at the lowest possible cost and whether enough deposits are available to fund
those loans the bank wishes to make.
Deposit mobilization is a fundamental part of banking activity. Mobilization of saving

through intensive deposit collection has been regarded as the major tasks of banks. Bank
deposit is money placed into a banking institution for safe of keeping, to earn risk free
income in the form of interest, or to keep for future use. According to Banson, et al. (2012),
“Mobilization of deposit for a bank is as essential as oxygen for human being”. Deposit
mobilization is one of the main functions of banking business and so an important source of
working fund for the bank. Deposit mobilization is the collection of cash or funds by a
financial institution from the public through its current, savings, fixed and recurring accounts
and other banks’ specialized schemes.
The banks should introduce various deposit schemes so that these can attract a variety of
people to suit their taste. The banks offer a number of deposit schemes to the public which
include fixed deposit, saving deposit, current deposit and the like. The mobilization of
resources through deposits helps the bank to meet the growing demands from various sectors
of the economy namely, agriculture, small scale industry, weaker sections of the community
and the like. “The quantum of deposits and growth rate in deposit figures shows the extent of
public confidence that a bank enjoys”. It is the size of the deposits that largely decides the
lending potential of a bank (Selvaraj & Kumar, 2015).
There are a number of challenges and opportunities that impede and facilitate deposit
mobilization by banks. The challenges are viewed as the impediments that hinder or
2
negatively affect bank’s efforts of mobilizing deposits while opportunities are factors that
strengthen and encourage efforts of banks in mobilizing deposits from various sources using
different schemes of deposit mobilization. Empirical findings of various researchers
undertaken at national and international levels indicate that there are a number of challenges
that deter banks not to mobilize deposits as much as they planned and/or anticipated to do so.
There are several opportunities identified and documented by researchers and scholars that
positively impact the efforts of banks in mobilizing deposits. For example, service quality,
branch expansion, interest rate, technology, disposable income and market strategy are
positively and statistically significant impact on the bank deposit growth. This means that
service quality, branch expansion, interest rate, technology, disposable income and market
strategy are opportunities of deposit mobilization for banks. Again, using various products
and services with varying levels or amounts of interest rates, built public images, innovation
and use of user friendly technologies, economic growth, branch expansion, population
growth, increase in per capita income, responsiveness and service quality, good financial
performance, and so on are reported as the major opportunities of banks to effectively and
efficiently mobilize deposits (Oke, 2007; Sebastiani and Payola, 2010; Junarsin, 2010;
Maharana, Choudhury and Ashok Panigrahi, 2015). Also, another researcher reported that
offering services around-the-clock and during all 7 days, provisions of innovative facilities
like mobile banking, internet banking and door-step banking are further opportunities that
strengthen deposit mobilization efforts of banks in Sri Lanka and in all other countries
(Hemachandra, 2009).
However, customer’s dissatisfaction, inaccessibility of banks and their branches, absence of

various or different types of accounts and schemes and deposit mobilization program as well
as bad or low public images of the banks, political instability, high level of social unrests,
presence of wars and conflicts and violence, provision of limited kinds of services, low level
of public awareness, high bureaucracy in opening, withdrawing and saving of/from/to
accounts, obsolescent technology utilizations, failure to undertake market research to
determine potential customers needs and demands, low level of innovation and motivation of
staffs, high levels of market inflation, resilience and/or decline in per capita income of
individuals, low profitability and lower liquidity rates of banks, agent transaction, low level
of educational qualifications of employees and staffs, low security and guaranty offered by
banks, poor management styles and approaches, poor service innovation activity of banks,
3
absence of market promotion and advertisement tools and techniques, low level of market
penetrance and market shares and the likes are identified and reported by various researchers
and scholars as challenges that impede deposit mobilization levels and efforts of banks at
local, regional, national and international arenas worldwide (Samuel Tesfahunegn, 2015;
Fekadu Yosef, 2019; Kibebe Gerawork, 2016; Pesa and Muturi, 2015; Gunasekara and
Kumari, 2018; Junarsin, 2010;Oke, 2007; Samarasiri, 2014; Maria and Sergio, 2001).
Therefore, the importance of undertaking study to investigate deposit mobilization levels,

challenges and opportunities of Awash Bank (AB), S. C and Cooperative Bank of Oromia
(CBO), S. C by making comparative analysis on their deposit mobilization levels,
effectiveness, challenges and opportunities of deposit mobilization in Adama city was
unquestionable.
1.2. Statement of the problem

The levels and effectiveness of deposit mobilization, challenges and opportunities of deposit
mobilization, and the similarities and differences in levels and effectiveness of deposit
mobilization, and the challenges and opportunities of deposit mobilization of Awash Bank
(AB), S. C and Cooperative Bank of Oromia (CBO), S. C in Adama City were not
documented so far. Also, the challenges and opportunities of deposit mobilization of AB, S.
C and CBO, S. C as well as comparative studies on their similarities and differences in terms
of deposit mobilization levels, effectiveness, challenges and opportunities were not addressed
yet and properly documented. In the absence of well-articulated and documented empirical
evidences and findings, it is hardly possible to design and implement strategies that help
overcome deterring challenges and strengthen encouraging opportunities of banks in their
attempts and efforts to effectively and efficiently mobilize deposits from various sources
using different schemes of mobilizations that help them ensure the availability of sufficient
deposits. Scholars argue that the availability of sufficient deposits in banking business is
highly crucial for their existence, profitability and provision of financial services like loans
and credits for its customers (Mshauri, 2012; Samuel Tesfahunegn, 2015; Fekadu Yosef,
2019; Kibebe Gerawork, 2016). Efficient and high levels of deposit mobilization are one of
the prerequisites for the availability of sufficient deposits in banking industries for same ends.
This, in turn, is dependent on reinforcing factors or opportunities and deterring/impeding
factors or challenges.
4
Several previous research studies’ findings reveal that there are various challenges that
impede and many opportunities that encourage deposit mobilization of banking industries
throughout the globe. In relation to these, customers dissatisfaction, inaccessibility of banks
and their branches, absence of various or different types of accounts and schemes and deposit
mobilization program as well as bad or low public images of the banks, political instability,
high level of social unrests or shocks, presence of wars and conflicts and violence, provision
of limited kinds of services, low level of public awareness, high bureaucracy in opening,
withdrawing and saving of/from/to accounts, obsolescent technology utilizations, failure to
undertake market research to determine potential customers needs and demands, low level of
innovation and motivation of staffs, high levels of market inflation, resilience and/or decline
in per capita income of individuals, low profitability and lower liquidity rates of banks, agent
transaction, low level of educational qualifications of employees and staffs, low security and
guaranty offered by banks, poor management styles and approaches, poor service innovation
activity of banks, absence of market promotion and advertisement tools and techniques, low
level of market penetrance and market shares and the likes are identified and reported by
various researchers and scholars as challenges that impede deposit mobilization levels and
efforts of banks at local, regional, national and international arenas worldwide (Pesa and
Muturi, 2015; Gunasekara and Kumari, 2018; Junarsin, 2010;Oke, 2007; Samarasiri, 2014;
Maria and Sergio, 2001; Samuel Tesfahunegn, 2015; Fekadu Yosef, 2019; Kibebe Gerawork,
2016).
Mauki (2004) in eastern and central Africa hypothesized the loans, interest rates and cost of
advertising among others as the determinants of deposit mobilizing in commercial banks. The
interest rate and cost of advertisement were found to have positive relationship with total
deposit although interest rate was found to be statistically insignificant deposit mobilization
factor. The higher or the more attractive the interest rate paid for deposit is, the greater the
amount of deposit mobilization; and the vice versa. This implies that raising interest rate and
low cost of advertisement are the opportunities of deposit mobilization while stable or
declining interest rate and higher costs of advertisement are the challenges impeding deposit
mobilization by banking industries. The implication of study was that the interest rate should
not aimed to increase deposits through raising interest rate on deposit, but rather the amount
to be charged should depend on the type of deposits.
5
Maharana, Choudhury and Ashok Panigrahi (2015) undertook a study to assess deposit
mobilization of commercial banks employing a comparative study of BOB and Axis Bank in
Bhubaneswar city using mixed study approach. Their findings reveal that the compound
annual growth rate of total deposits of SBI and its associate banks is 16% whereas CAGR is
highest for the nationalized banks followed by private banks and has a lowest figure of
13.27% in case of foreign banks. Foreign banks particularly show a very less variance in its
growth i.e. 223.82, which means the deposit mobilization, is varying less rapidly than other
banks. Deposit mobilization of bank of Baroda from 2011 to 2015 reveals that there is a
nearly constant ratio of total deposits to total liability. As far as growth in different deposits is
concerned the CAGR for current deposit is 23% followed by term deposit 20.19%. Savings
deposit shows a very compound average growth rate of 14.34%. This reveals that the bank is
unable to attract customers for saving deposits. There is a significant increase in current
deposit and term deposit over the period under study. Therefore there is a well mobilization
of demand deposit and term deposits by bank of Baroda over the period. The CAGR of total
deposits of BOB is higher than Axis Bank. Though there is a marginal difference between
BOB and Axis Bank in respect of women customers, Axis Bank has depositors from business
sector. It means that the potential of Axis Bank depositors is not much as Employee
depositors. Further, the percentage of unemployed/retired is 18.18% in BOB and 19.05% in
Axis Bank which reveals that the possibility of mobilizing term deposits is more for Axis
Bank than BOB. The average operation of each type of account by the respective depositor is
very much high in case of current deposit account because they are used by which
Businessman and administrative Agencies. The “average operations” of current deposit
account deposit per month is 2.56 in BOB and it is 3.31 in Axis bank which is far higher than
any other account of course the recurring deposit account is operated once in a month per
account holder. Hence, it is to be concluded that cost of servicing of current deposit account
is likely to be more than the operation of any other deposit account. So such accounts are
charged with service charges at a particular rate to the current deposit account concerned.
Providing the facilities may help the customers to transact with their bank without moving
from their offices and homes. ATM is used more frequently than any other electronic devices.
The use of ATM customer is 1.66 in BOB where as it is 1.38 by the depositors of Axis Bank,
soon can conclude that among all the electronic devices ATM is highly popular. Internet
banking rank in both the banks with an average weight of a 0.31 and 0.51 in BOB and Axis
Bank respectively it means that the customers of Axis Bank are using the Internet banking
more frequently than by the depositors of BOB. There is significant decline in deposits in
6
scheduled commercial banks in Bhubaneswar during the period from 2009-10 to 2012-13. As
there is a significant increase in current deposit and term deposit over the period under study,
the mobilization of demand deposit and term deposits by bank of Baroda is more than Axis
bank over the period. On the whole, it is concluded that Bank of Baroda in Bhubaneswar city
has performed well in deposit mobilization in five years from 2010-11 to 2014-15 than its
counterpart (Maharana, Choudhury and Ashok Panigrahi, 2015).
Samuel Tesfahunegn (2015) conducted an empirical study that intends to identify the
challenges in deposit mobilization for private banks in Ethiopia by concentrating the case on
Awash Bank (S.C), Descriptive method particularly survey design approach was adopted for
the study. The survey was conducted with staff individuals working in Awash Bank S.C at
different positions using questionnaire. In addition, the study used unstructured review of
documents and records held by other commercial banks and NBE. The findings of the study
show that AB, S. C and other private banks are operating in a dynamic and highly
competitive environment and there is high possibility of catch-up and by-pass among these
banks. Also, private commercial banks should prepare for the inevitable stiff competition that
will arise from local and with the eminent future entrant of foreign banks. By doing so, they
can solve the paradox of the liquidity problem and the unbanked resources (Samuel
Tesfahunegn, 2015).
Kibebe Gerawork (2016) tried to empirically determine factors that affect deposit
mobilization, the associated costs of deposit mobilization in private banks. Therefore, the
study adopts mixed approach to gather the data. The primary data is gathered using
questionnaire. Sampling method of the primary data is purposive sampling technique. While
the secondary sources of data were extracted from annual reports of all private commercial
banks of Ethiopia, data from National Bank of Ethiopia (NBE) and from Central Statistical
Authority (CSA). The study shows that age dependency ratio, investment and money supply,
are the most significant factors of deposit mobilization activity. The other variable such as
Per capita income has insignificant power to influence the dependent variable (Kibebe
Gerawork, 2016)
An independent study conducted by Fekadu Yosef (2019) aims to examine the factors
affecting deposit mobilization of Dashen Bank specifically on branches of Addis Ababa using
Quantitative and qualitative research approach by focusing on five years deposit performance
of the bank as indicator of its extent of deposit mobilization. He found that the five years
7
deposit performance of the bank indicates that total deposits of each year increased because
the bank worked hard on branch expansion which is identified in this study as one of the
independent variables that contributed for deposit mobilization. Moreover, his findings show
that there is a relationship between the dependent variable (deposit) and independent variable;
and the correlation test results reveal that independent variables such as Service Quality,
Branch Expansion, Interest Rate, Technology, Disposable Income and Market strategy are
positively and statistically significant on the bank deposit growth.
Moreover, the challenges of deposit mobilization facing banks vary from one bank to
another, and even within the same bank, they vary from one branch to another; and the same
holds true in the case of opportunities of deposit mobilization. Statistics of the National Bank
of Ethiopia (NBE) describe that there are differences in levels of deposit mobilization that
vary as a function of challenges and opportunities among governmental commercial banks,
cooperative banks and other privately owned and operating banks across the country and also
at regional and local levels (NBE, 2019). The report also emphasizes that challenges and
opportunities of these banks in mobilizing deposits are not the same. For instance, mobilizing
deposits from primary Farmers’ Cooperatives and their Unions, that stays for longer periods
as compared to deposits mobilized from individuals reported as an opportunity for
Cooperative Bank of Oromia unlike other privately owned banks (NBE, 2019).
However, except the study done by Maharana, Choudhury and Ashok Panigrahi (2015) to
assess deposit mobilization of commercial banks employing a comparative study of BOB and
Axis Bank in Bhubaneswar city, all of them had not made a comparative study to investigate
and document challenges and opportunities of deposit mobilization on Awash Bank (S.C) and
Cooperative Bank of Oromia (S.C) in Adama city branches and in any settings or branches
across the country to date. Furthermore, there were no previously reported findings of
empirical studies done to investigate deposit mobilization levels of Awash Bank (S.C) and
Cooperative Bank of Oromia (S.C) that compared and contrasted their deposit mobilization
levels, challenges and opportunities as far as the knowledge of the principal researcher was
concerned. Thus, in order to fill these identified knowledge gaps, this study aimed to assess
deposit mobilization levels and effectiveness of deposit mobilization, challenges and
opportunities of deposit mobilization of AB SC and CBO SC by making comparative
analysis on their deposit mobilization levels, challenges and opportunities of deposit
mobilization of the two banks in Adama city.
8
1.3. Major Research Questions

Based on the above discussion, the research tried to address the following research questions.
1. What are the deposit mobilization levels of Awash Bank, S. C. and Cooperative Bank
of Oromia, S. C in Adama city?
2. Which bank operates more effectively in mobilizing deposits in Adama city?
3. What are the major challenges impeding deposit mobilizations Awash Bank, S. C. and
Cooperative Bank of Oromia, S. C in Adama city?
4. Which opportunities reinforce the activities of Awash Bank, S. C. and Cooperative
Bank of Oromia, S. C in mobilizing deposits in Adama city?
5. Are there differences and/or similarities between Awash Bank, S. C. and Cooperative
Bank of Oromia, S. C in terms of their challenges and opportunities in Adama city?
1.4. Objectives of the Study

1.4.1 General Objective
The main objective of the study was to comparatively assess the challenges and opportunities
of Awash Bank, S. C. and Cooperative Bank of Oromia, S. C in Adama city.
1.4.2. Specific Objectives

1. To assess the deposit mobilization levels of Awash Bank, S. C. and Cooperative Bank
of Oromia, S. C in Adama city,
2. To compare and contrast deposit mobilization effectiveness of Awash Bank, S. C. and
Cooperative Bank of Oromia, S. C in Adama city,
3. To determine the major challenges impeding deposit mobilizations of Awash Bank, S.
C. and Cooperative Bank of Oromia, S. C in Adama city,
4. To identify the main opportunities of Awash Bank, S. C. and Cooperative Bank of
Oromia, S. C in Adama city, and,
5. To compare and contrast the two banks in terms of their challenges and opportunities
in Adama city.
1.5. Significance of the study

The findings of the study believed to contribute much towards designing and implementing
evidence-based intervention strategies that could alleviate the hindering effects of challenges
that negatively affect deposit mobilization of the two bank’s branches in Adama city. The
study has great contribution to deposit mobilization practice of Awash Bank, S. C. and
Cooperative Bank of Oromia, S. C of Adama city branches. It would help the banks to design
9
and implement key factors of deposit mobilization that will be identified by this study. The
research will explain the challenges and opportunities of deposit mobilization practice of
Awash Bank, S. C. and Cooperative Bank of Oromia, S. C of Adama city branches.
According to Kazi (2012), “the main business for banks is accepting deposits and granting
loans. The more the deposits the banks receive and mobilize the more profit they make by
granting more secure loans.” Hence the researcher comparatively investigated the challenges
and opportunities of deposit mobilization and gave remedial solution to management by
suggesting key challenges that significantly might have hindered their levels of mobilized
deposits that negatively contributed for growth of deposit and which hardly support the bank
to successfully meet its target or budget by overcoming the challenges that were identified in
the study. The study benefits Awash Bank, S. C. and Cooperative Bank of Oromia, S. C of
Adama city branches’ shareholders, management, staff, and other stakeholders that would
desire to increase in deposit mobilization could satisfy the current demand for financing
which contributes to increase the bank’s profitability, also support economic growth the
country.
It could also be used by the management of the bank to strengthen opportunities that would
contribute towards the growth and increment of deposits through various suggestible
mechanisms of deposit mobilization that imposes improvement of deposits so that the
deposits level of the bank can be as targeted or planned. Moreover, this study could serve as
source of information to other researchers who were interested to conduct further study on
similar topic in future. Finally, the findings of this study would help to broaden the scope of
knowledge and to enrich body of empirical findings on the main thematic issues of the study.
1.6. Scope of the study

The study was delimited to the branches of Awash Bank, S. C. and Cooperative Bank of
Oromia, S. C operating in Adama city. In terms of content, it was delimited to assessing the
internal and external challenges and opportunities of deposit mobilization of the two banks
only. Lack of sufficient time and adequate financial resource were other limitations of the
study.
Although, Awash Bank, S. C. and Cooperative Bank of Oromia, S. C had 475 and 404
branches respectively both in Adama city and outside Adama as at June 30, 2019, the
research used geographic delimitation and focused on branches of Awash Bank, S. C. and
Cooperative Bank of Oromia, S. C operating in Adama city in 2012 (2019/20) fiscal year
10
only. Regarding subject delimitation, this study was limited to respondents from branches of
the two banks’ branch managers, Senior Customer Service Officers and members of deposit
mobilization teams of Adama city. Among the various banking services provided by Awash
Bank, S. C. and Cooperative Bank of Oromia, S. C operating in Adama city, the study
focused on deposit mobilization challenges and opportunities which was topic delimitation.
Finally, due to time delimitation, the researcher examined the internal and external challenges
and opportunities of deposit mobilization of the two banks based on prior three fiscal years
plans and performance that ranged from 2009EC (2016/17) to 2011EC (2018/19) fiscal years
of operation. The data collection used was based on minimum cost, time, and level of effort.
Hence, the data collection method was through administering questionnaire to the two banks’
branch managers, senior customer service officers and members of deposit mobilization
teams of Adama city.
1.7. Limitations of the Study

Some of the limitations of this study included insufficient time and budget. In addition, other
challenges which were found to bring adverse effect on the results of the study included the
extent of reliability and accuracy of self-reported data on the challenges and opportunities of
the targeted segments of the population towards levels of deposit mobilization of the two
banks in Adama city during the specified time period that were covered in the study.
However, to overcome those limitations, the researcher tried to inform the study participants
about the benefits of providing accurate and reliable responses for the questionnaires and the
importance of the outcomes of the study for tackling challenges deterring deposit
mobilization and for strengthening the opportunities reinforcing deposit mobilization. Finally,
it would be hardly possible to generalize the findings of the study for the Awash Bank, S. C.
and Cooperative Bank of Oromia, S. C in the Adama city.
1.8. Study Area and Population

The study was conducted in Adama city among Awash Bank, S. C. and Cooperative Bank of
Oromia, S. C branches operating in the city in. Adama city is the capital city of Eastern Shoa
Zone. It is located in Eastern Shoa Zone, Oromia regional state about 99 km far away from
Addis Ababa city in the eastern direction. There are fourteen administrative Kebeles in
Adama city. The city has a city administrative council and a municipality. Agro-climatically;
it is Kolla, which is dry and hot. The annual mean rainfall and temperature of the town are
800mm and 250C respectively. Adama city is a home for different nationalities and peoples
11
(or ethnic groups) and hence there are many languages that are spoken in the town in terms of
linguistic consideration.
The projected total population of Adama city in 2012 (2019/20) fiscal year based on the 1999
(2006) National Housing and Population Census (NPHC) reported result for Oromia
Regional State by the CSA in 2007 (CSA, 2007) was about 155, 349 [M= 79, 013; F= 76,
336]. Accordingly, there were 34, 522 households in the town in 2019/20; and there were 11
cooperative bank of Oromia (CBO) S.C. and 10 Awash Bank (AB) S.C. branches in the city
that were formally registered, licensed and operating in the fiscal year of the study. The total
number of AB S.C. employees were 249 [M=145; F= 104] and that of CBO S.C. were 154
[M= 99; F= 50]. Therefore, the total numbers of the branches of the two banks operating in
Adama city were 403 [M= 244; F= 159].
1.9. Operational Definitions of Key Terms

Bank: is considered as oligopolistic institutes which have high interdependency and high
competition; and is also referred to as depository financial institutions like banks, savings
institutions and credit unions that obtain funds mainly through deposits from the public. Bank
is intermediary financial institution that plays a vital role in the efficient allocation of
resources of countries by mobilizing resources for productive activities. Another broader
definition of a bank refers to it as any financial institution that receives, collects, transfers,
pays, exchanges, lends, invests, or safeguards money for its customers.
Challenges: in this study refers to constraints or impediments that hinder the effectiveness
opportunities and practices of banking institutions to mobilize deposits in the study area.
Also, it is defined as the factors that have been proved to stand on the way of banking
institutions to mobilize deposits thereby preventing them from active mobilization of deposits
from depositors and the public.
Deposit Mobilization: is the collection of cash or funds by a financial institution from the
public through its current accounts, savings and fixed accounts and other specialized
schemes.
Deposit: is considered as the money and/or funds deposited at banks which is a cost effective
working funds that can increase the sustainability and profitability of the deposit taking
institutions (Garo, 2015). It is also viewed as money placed into a banking institution for safe
12
keeping, to earn risk free income in the form of interest, or to keep for future use in the
context of the present usage of the term.
Opportunities: in the context of this study refers to the existing national and sub-national
institutional and organizational frameworks, politico-legal instruments and policies that
determine and define the availability, nature and scope of favorable situations for banking
institutions to mobilize deposits.
1.10. Organization of the Research work

The research work report is organized into five chapters. The first chapter is the introductory
part which includes the background of the study, statement of the problem, objective,
significance, scope, the limitations and operational definitions of terms. The second chapter
presents the review of literature relevant to the research topic. The third chapter discusses
about research methodology and design. In chapter four, data analyses, presentation and
interpretations are detailed. Chapter five treats summary, conclusions, recommendations and
further studies to be conducted based on the findings of this research work. References and
appendices are also the parts of this research work report.
13
CHAPTER TWO
2: REVIEW OF RELATED LITERATURE
2.1. Theoretical Review

2.1.1. Deposit Mobilization
Bank deposit is an amount of money held at a financial institution on behalf of an account
holder for safekeeping, Most bank deposits are insured by organizations to reduce their risk.
Bank deposits are made to deposit accounts at a banking institution, such as savings accounts,
checking accounts and money market accounts. The account holder has the right to withdraw
any deposited funds, as set forth in the terms and conditions of the account. The deposit itself
is a liability owed by the bank to the depositor (the person or entity that made the deposit),
and refers to this as liability rather than to the actual funds that are deposited (Adam, 2005
cited in Mshauri, 2012).
Deposit mobilization said to means campaigning and collecting customer deposits. The banks
would have special campaigns where they would interact with a lot of people and invite them
to make deposits with their bank. Mobilizing savings involves overcoming the transaction
costs associated with collecting savings from different individuals and the informational
asymmetries associated with making savers feel comfortable in relinquishing control of their
savings (Maimbo, 2003 cited in Mshauri, 2012). Deposit mobilization has various role on
financial system, it can accumulate capital, improves resources allocation and boost
technological innovation (Sirri and Tufano, 1995 cited in Mshauri, 2012).
Deposit mobilization is an integral part of banking activity. Mobilization of savings through

deposit collection has been regarded as the major task of banking industry. Deposit
mobilizations are an indispensable factor to increase the sources of the banks to serve
effectively. Mobilizing deposits play an important role in development of all spares of
economy (Shettar, 2014). According to Banson, et al. (2013), deposit mobilization is the
collection of cash or funds by a financial institution from the public through its current
accounts, savings and fixed accounts and other specialized schemes. Normally deposits are
considered as the cost effective working funds that can increase the sustainability and
profitability of the deposit taking institutions (Garo, 2015).
14
Richard et al. (2015), defined deposit mobilization as the main function of financial
institution. Mobilizing funds from the surplus economic agents to the deficit economic agents
is the process of deposit mobilization and it is thus affected to increase the economic growth.
In banking sector deposit mobilization is a scheme intended to encourage customers to
deposit more cash with the bank and this money in turn will be used by the bank to disburse
more loans and generate additional revenue for them. Furthermore, the key role of the loans,
banks offer the more profit they make. However, the success of the deposit mobilization
process depends on development of the financial system as well as the strategic practices
adopted by banks (Richard, 2015).
According to Richard, Florence and Zenon (2015) advocate that to mobilize enough deposits,
banks should present various kind of deposit schemes to attract customers. Normally
customers have various kinds of needs and wants with respect to their gender, age,
profession, level of income, type of necessity, tenure, size of business and so many other
factors lead to make a discrepancy among customers when they deposit their money in banks.
Therefore, banks should be more attractive and strategic to absorb those deposits
(Hemachandra, 2009).
Generally, in economics theory, banks are considered as oligopolistic institutes which have
high interdependency and high competition. Therefore, banks to ensure the competitiveness,
the previous traditional and contemporary methods of deposit mobilization should be
substituted by the modern technology and multiple characteristics. These new schemes of
deposit mobilization address to the diverse needs of people and many instances, in today’s
banking context, banks adopt many strategic advertising methods to mobilize more deposits.
The benefits and incentives (lotteries, gifts) to depositors, banks offer services around-the-
clock and during all 7 days, innovative facilities like mobile banking, internet banking and
door-step banking are appeared as the contributory factors to mobilize deposits in modern
day banking industry in Sri Lanka and in all other countries (Hemachandra, 2009).
2.1.2 Major Types of Deposit products or Accounts

Banks provide different types deposit accounts to mobilize significant amount of deposits
from different classes of people or people from all level of the economy. To enhance deposits
mobilization banks classify depositors in to segments and use customer relationship
management to avail the products based on the test and preference of customers. Deposit
accounts are savings account, current account or any other type of bank account that attract
15
money to be deposited and withdrawn by the account holder. These transactions are recorded
on the bank’s books, and the resulting balance is recorded as a liability for the bank and
represents the amount owed by the bank to the customer. Some banks may charge a fee for
this service, while others pay customer interest on the funds deposited. The account holder
has the right to withdraw any deposited funds, as set forth in the terms and conditions of the
account. The following are most common type of bank deposit accounts.
A deposit account is a current account, savings account, or other type of bank account, at a
banking institution that allows money to be deposited and withdrawn by the account holder.
These transactions are recorded on the bank’s books, and the resulting balance is recorded as
a liability for the bank and represents the amount owed by the bank to the customer.
According to Islam & Ghosh (2014) the major types of deposits are:
Checking accounts or Demand Deposit: It consists of funds held in an account from which
deposited funds which can be withdrawn at any time without any advance notice to the
depository institution or bank or a deposit account held at a bank or other financial institution,
for the purpose of securely and quickly providing frequent access to funds on demand,
through a variety of different Channels. Demand deposits can be “demanded” by an account
holder at any time. Many checking accounts today are current account or demand deposits
accounts and are accessible by the account holder through a variety of banking options,
including through tellers window, ATM, online banking, and agent banking. Because money
is available on demand these accounts are also referred to as demand accounts or demand
deposit accounts.
Savings accounts: Accounts maintained by retail banks that pay interest but cannot be used
directly as money (for example, by writing a cheque). Although not as convenient to use as
checking accounts, these accounts let customers keep liquid assets while still earning a
monetary return. It is also a deposit account that is held at bank or other financial institution
that provides principal security and a modest interest rate. Depending on the specific type of
savings account, the account holder may not be able to write checks from the account or
he/she/it access the account without incurring extra fees or expenses like cost of checks and
the account is likely to have no limited number of transfers/transactions.
Term deposit: A money deposit at a banking institution that cannot be withdrawn for a
preset fixed ‘term’ or period of time. When the term is over it can be withdrawn or it can be
16
rolled over for another term. In other words, fixed time deposit or certificate of deposit (FTD)
held for a fixed-term, with the understanding that the depositor can make a withdrawal only
by giving prior notice. A time deposit is an interest-bearing bank deposit that has a specified
date of maturity. Generally speaking, the longer the term, the better interest yield on the
deposited money.
In addition to the above types of deposit products or accounts, researcher mentioned or listed
demand deposit, savings deposit, time deposit, Wadi’ah savings account, Qard demand
account, Mudarabah saving account and Mudaraba fixed account as other major types of
deposit products or accounts (Fekadu Yosef, 2019).
2.1.3. Overview of Challenges and Opportunities of Deposit Mobilization

The deposit mobilization is not at all an easy task; rather it is both critical and complicated
issue. Consequently, deposit mobilization is deterred by impeding factors or challenges while
it is facilitated by presence of favorable conditions and/or opportunities. There are differences
among banks in terms of the potential and/or actual challenges, and potential and/or actual
opportunities that hamper or reinforce deposit mobilization. The factors or determinants of
bank’s deposit mobilization could be classified as internal and external factors; and these
factors can be classified into bank specific (internal) and macro-economic (or country
specific or external) variables (Ongore & Kusa, 2013). The internal factors are individual
bank characteristics which affect the bank’s performance in terms of deposit mobilization.
These factors are basically influenced by the internal decisions of management and board.
The external factors are sector wide or country wide factors which are beyond the control of
the company (Aftabi, Daneshvar, Karimbakhsh, Shadab & Mortezaei, 2013). External factors
are uncontrollable factors by bank management and factors such as inflation, money supply
growth rate, national income, economic growth, GDP growth rates and central bank policy
are included whereas internal and/or bank specific factors can be categorized into service
factors, financial factors, relationship and human factors, physical and institutional affiliation
factors (Ibid). According to Khalayi, Ondiek & Musiega (2014) there are a number of
challenges that brought about poor deposit mobilization. These include inability to disburse
loans to qualifying members on demand, inability to meet operation costs, inability to service
debts, unstable board of directors due to frequent reshuffle as disgruntled members vote
officials out, quitting of members to competitors and falsification of financial reports. These
can cause the voting out of elected officials on accusations of fraud, financial
17
mismanagement practices. In addition, dissatisfied members can quit in large numbers to join
alternative and emerging financial institutions for fear of losing their savings if the situation
deteriorates.
Still, some scholars and researchers classify determinants of deposit mobilization into
challenges and opportunities. The challenges refer to those factors that negatively impact
deposit mobilization whereas factors that positively contribute towards banks’ effort of
deposit mobilization as opportunities (Maharana, Choudhury and Ashok Panigrahi, 2015).
Regardless of the classification schemes employed in categorizing determinants of deposit

mobilization, factors that either negatively or positively contributes towards deposit
mobilization are briefly described as detailed below.
Firstly, concerning the challenges the findings of the study show that AB and other private
banks are operating in a dynamic and highly competitive environment and there is high
possibility of catch-up and by-pass among these banks that could be the potential challenges
and/or impediments of banks in mobilizing deposits (Samuel Tesfahunegn, 2015). Moreover,
customer’s dissatisfaction, inaccessibility of banks and their branches, absence of various or
different types of accounts and schemes and deposit mobilization program as well as bad or
low public images of the banks, political instability, high level of social unrests or shocks,
presence of wars and conflicts and violence, provision of limited kinds of services, low level
of public awareness, high bureaucracy in opening, withdrawing and saving of/from/to
accounts, obsolescent technology utilizations, failure to undertake market research to
determine potential customers needs and demands, low level of innovation and motivation of
staffs, high levels of market inflation, resilience and/or decline in per capita income of
individuals, low profitability and lower liquidity rates of banks, agent transaction, low level
of educational qualifications of employees and staffs, low security and guaranty offered by
banks, poor management styles and approaches, poor service innovation activity of banks,
absence of market promotion and advertisement tools and techniques, low level of market
penetrance and market shares and the likes are identified and reported by various researchers
and scholars as challenges that impede deposit mobilization levels and efforts of banks at
local, regional, national and international arenas worldwide (Samuel Tesfahunegn, 2015;
Fekadu Yosef, 2019; Kibebe Gerawork, 2016; Pesa and Muturi, 2015; Gunasekara and
Kumari, 2018; Junarsin, 2010;Oke, 2007; Samarasiri, 2014; Maria and Sergio, 2001).
18
Secondly, with respect to opportunities, there are several opportunities identified and
documented by researchers and scholars that positively impact the efforts of banks in
mobilizing deposits. For example, Fekadu Yosef (2019) conducted an independent study on
Dashen Bank SC and found that service quality, branch expansion, interest rate, technology,
disposable income and market strategy are positively and statistically significant impact on
the bank deposit growth. This means that service quality, branch expansion, interest rate,
technology, disposable income and market strategy are opportunities of deposit mobilization
for banks. Again, using various products and services with varying levels or amounts of
interest rates, built public images, innovation and use of user friendly technologies, economic
growth, branch expansion, population growth, increase in per capita income, responsiveness
and service quality, good financial performance, and so on are reported as the major
opportunities of banks to effectively and efficiently mobilize deposits (Oke, 2007; Sebastiani
and Payola, 2010; Junarsin, 2010; Maharana, Choudhury and Ashok Panigrahi, 2015). Also,
another researcher reported that offering services around-the-clock and during all 7 days,
provisions of innovative facilities like mobile banking, internet banking and door-step
banking are further opportunities that strengthen deposit mobilization efforts of banks in Sri
Lanka and in all other countries (Hemachandra, 2009).
With respect to classification of determinants of deposit mobilization into internal and

external factors, types of variables categorized as external or country specific factors and
those categorized as internal or bank specific factors are discussed in the following sub-
sections.
2.1.3.1 External and/or Country Specific Factors

There are several external and/or country specific factors that either positively or negatively
influence deposit mobilization by banks. To cite the most important ones, inflation,
population growth of the country, per capita income of the society, economic growth,
regulation, consumer price index and shocks are external and/or country specific factors that
affect deposit mobilization of banks (Herald and Heiko, 2009; Mustafa and Sayera, 2009;
Eshetu & Mammo, 2009; Ismal, 2010; Voon-Choong et al, 2010). According to other
researchers and scholars view, inflation, government laws or regulations, economic
development, individual disposable incomes, money supply, investment and age dependency
ratio are external and/or country specific factors that affect deposit mobilization of banks
(Tareq, 2015; Zeidy, 1996; Ahlswede & Schildbach, 2012; Zeidy, 1996; Mashamba,
19
Magweva, & Gumbo, 2014; Alipour, 2014; Ongore & Kusa, 2013; Nwanko, Ewuim, &
Asoya, 2013; Al-Qudah & Jaradat, 2013; Hyung, 2013; Loichinger, Hammer, Prskawetz,
Freiberger, & Sambt, 2014). Finally, when these factors positively affect deposit mobilization
of banks and/or positively correlate with levels of deposits mobilized, they make up the
opportunities but when they negatively impact bank’s deposit mobilization and/or negatively
correlate with levels of deposits mobilized, they constitute challenges.
2.1.3.2. Internal and/or Bank Specific Factors

There are a number of internal and/or bank specific factors that either positively or negatively
influences deposit mobilization by banks. When these factors positively affect deposit
mobilization of banks, they are considered as opportunities but when they negatively impact
bank’s deposit mobilization, they become challenges. Liquidity of the banks, bank size, bank
concentration, human capital, management quality, technology, gross domestic product
(GDP), product differentiation, deposits interest rate, branch expansion, service quality (such
as reliability, responsiveness, assurance, empathy and tangibles), appropriate technology
(e.g., electronic banking, ATM, direct deposit, debit card purchases, prepaid cards and mobile
banking), profitability (financial performance), market strategy, market competition,
customer relationship management, bank cross-selling and capital adequacy are internal
and/or bank specific factors that affect deposit mobilization of banks (Banson, Sey, & Sakoe,
2012; Alipour, 2014; Zillur Rahman, 2015; Al-Ajam & Nor, 2015; Shereif Mahdi &
Dawson, 2007; Pramod, Li, & , 2012; Nelson, 1999; Malhotra & Singh, 2007; Zewdu, 2014;
Eshetu, Tesome, &Abebe, 2013; Rakesh, Arun, & Varun, 2015; Tareq, 2015; Khalai, Ondiek,
& Musiega, 2014; Mashamba, Magweva, & Gumbo, 2014; Mohammad and Mhadi, 2010;
Harald and Heiko, 2009; Philip, 1968; Mustafa and Sayera, 2009; Bhatt, 1970; Garo, 2015;
Hettiarachchi, 2005; Athukorala and Sen, 2003; Richard, 1971; Erna and Ekki, 2004;
Mohammed and Mahdi, 2010; Ali Sarlak, 2014; Siyambola, 2012; Wubitu, 2012; Boadi et
al., 2015; Tegene, 2012; Banqui, 1987; Bhattacherjee, 2012; Martin, 2013; Samuel, 2015;
Samarasiri, 2014; McNeal, 2014; Telatela, 2013; Khalily, 1987; Goiteom, 2011; Hooman et
al., 2016; Maharana et al., 2015; Suraweera et al., 2011; Viswanadhan and Bonso, 2014;
Bason , Sey and Sakoe, 2013; Kariyawasam and Jayasiri, 2016; Kanthi andSingu, 2015;
Ishak, Faridah and Zabil, 2012; Masood et al., 2014; Ryan, 2011). Moreover, competition
among banks, saving interest rate, number of branches (accessibility), saving mobilization
strategy (like transactions costs of clients, transactions costs of providers, lack of trust and
educational illiteracy and/or innumeracy), security, bank’s public image, services and
20
awareness are classified as internal and/or bank specific factors that affect deposit
mobilization of banks (Tobias and Themba, 2011; Indranarain 2009; Tobias and Themba,
2011; Thomas Ogoro, 2010; European Central Bank, 1999; Belayneh, 2011; Sudin Haron,
1996). To distinguish the challenges and opportunities of deposit mobilization, generally
when these factors positively affect deposit mobilization of banks and/or positively correlate
with levels of deposits mobilized, they constitute opportunities but when they negatively
impact bank’s deposit mobilization and/or negatively correlate with levels of deposits
mobilized, they make up the challenges.
2.2. Empirical Review of Relevant Literature

This section provides the relevant empirical review related to the challenges and
opportunities of deposit mobilization of banks. This research work is not the first to research
on the matters related to the deposit mobilization in commercial banks. Other researchers or
researching organizations have insights of practices, features and functioning of factors that
influence deposit mobilizations. Different bankers have applied these factors worldwide in
both developing and developed countries. Different experience can be learned and shared
among the different countries that have used factors influencing deposit mobilizations. Bank
deposit is money placed into a banking institution for safe keeping, to earn risk free income
in the form of interest, or to keep for future use. Before a decade, lack of investment
opportunities and the lesser demand for loan in Ethiopia discouraged financial intermediaries
from mobilizing saving and result in excess liquidity in bank which even limited their ability
to maximize the benefits of access to public savings. As a result, banks did not target
additional deposit, especially poor people’s deposits, which perceived as short term, unstable
and costly. Despite the minimal growth of banking activities in the last ten years, they are
currently facing an immense challenge to match the growing demand of loan with deposit
mobilization. The challenge to bank’s management also became critical since shareholders
expectation of sufficient return for their investment. Banks should maintain their competitive
position by deposits mobilization and deployment of same to various term loans which is
called financial performance. Credit deployment is the lion share of bank’s revenue. The
more the loans the banks disburse the more profit they make. Hence, bank managements
should devise alternative techniques to attract more customers and influence their staff to
mobilize more deposits, because banks do not have a lot of their own money to give as loans.
‘Banks depend on customer deposits to generate funds for granting loans to other customers’
(Kazi, 2012).
21
Mayes (1985), Vogel and Burkut (1986), Ross (1996) and Aresti (2002) cited in Mshauri
(2012), investigated factors that determined deposit mobilization in commercial banks. It was
found that there were a growing number of successful deposit mobilization programs in
developing countries and indicated the safe liquid deposit of reasonable yield can be crucial
in raising the income of non-wealth households. It was further founded that some factors such
as location of the banks, and interest were the major factors that affect the saving/deposit and
its campaign (mobilization).
Mauki (2004) in eastern and central Africa hypothesized the loans, interest rates and cost of
advertising among others as the determinants of deposit mobilizing in commercial banks. The
interest rate and cost off advertisement were found to have positive relationship with total
deposit although interest rate was found to be statistically insignificant deposit mobilization.
The implication of study was that the interest rate should not aimed to increase deposits
through raising interest rate on deposit, but rather the amount to be charged should depend on
the type of deposits.
Muro (2009; cited in Mshauri, 2012) examined the factors that influence deposit mobilization
in commercial banks in Tanzania. He included factors like IT, varieties of services a bank
offers, banks image and location in his study. The study compared these factors on both local
based bank such as CRDB and NMB and foreign based bank such as standard chartered and
Stanbic bank. The study interviewed 155 respondents including bank staffs and customers.
The study concluded that some factors such as IT, varieties of service, banks image and
locations had influence on deposit mobilization in commercial banks. The coefficient of t-test
statistics for local and foreign banks respectively suggested the positive significant
relationship between bank image and deposit mobilization for both local and foreign banks.
Mshauri (2012) analyzed factors determining deposit mobilization in commercial banks in

Tanzania. The researcher specifically examined the impact of Information technology,
location of the banks/branch and varieties of the service offered on deposit mobilization. The
research revealed that all factors include Information technology, location of the bank, and
varieties of the service offered influenced the deposit mobilization in commercial banks in
Tanzania.
Gunasekara and Kumari (2018) carried out the study which aims to investigate the most
effective factors affecting deposit mobilization, followed by a random sampling method, in
22
which 120 deposit account holders were selected as a sample from three different convenient
sample areas. The Questionnaires are equipped with questions to obtain primary data. Their
findings demonstrate that there is a significant and positive relationship between deposit
mobilization and deposit interest rate, security, branch expansion, services, technology and
awareness. Moreover, there is a significant relationship between living area and the amount
of deposits and the demographic variables, such as, gender, occupation, education level and
income significantly affect for deposit mobilization.
The findings of Pesa and Muturi (2015) revealed that agent transaction influences deposit
mobilization by bank agents in Kenya to a great extent, requirements for cash deposits are
made in national bank of Kenya branch thus influencing deposit mobilization by bank agents
in Kenya negatively that was done to establish the extent to which fraud at agent affect
deposit mobilization of bank agents, find the extent to which customer satisfaction affects
deposit mobilization of bank agents and establishing the extent to which the branch network
affect deposit mobilization of bank agents. The study employed a case study design. The
target population was 80 respondents and used a questionnaire to collect data.
Joyce (2015) investigated the challenges of deposit mobilization at agricultural development

bank in Ghana which seeks to investigate deposit mobilization within the operations of
Agricultural Development Bank with specific reference to the branches in the Kumasi
metropolitan area using descriptive study design to describe the behavior of individual
variables. His findings show that account opening processes, loan application processes, non-
functioning of ICT facilities inadequate branches and poor customer service delivery are
identified as some of the challenges facing ADB in their deposit mobilization operations. The
study recommends the following as some of the possible means of addressing the above
challenges. Regular training of staff, reduce loan application requirement, improves ICT
facilities, provision of attractive products such as mobile phone services, open new branches
at vantage locations and ensure good customer services.
Findings of another study done in Ghana by Opoku (2011) to identify the most effective and
efficient ways commercial banks in Ghana should employ to maximize the volume of
domestic deposits in the environment of high rural population, dominant informal sector
employment and macroeconomic instability which aims to evaluate the design of bank
products and services, assess their effectiveness of harnessing domestic deposits and
challenges they face in mobilizing deposits using mixed study approach that employed survey
23
and secondary data indicate that commercial banks in Ghana concentrate in the cities and a
few urban areas as well as their product design and services are targeted to the literate formal
sector employees. In addition, unfavorable macroeconomic conditions have resulted in
negative real interest rate on deposits while unnecessary government intervention has reduced
the confidence in the banking sector resulting low deposits receptions and mobilization.
Maharana, Choudhury and Ashok Panigrahi (2015) undertook a study to assess deposit
mobilization of commercial banks: A comparative study of BOB and Axis Bank in
Bhubaneswar city using mixed study approach. Their findings reveal that the compound
annual growth rate of total deposits of SBI and its associate banks is 16% whereas CAGR is
highest for the nationalized banks followed by private banks and has a lowest figure of
13.27% in case of foreign banks. Foreign banks particularly show a very less variance in its
growth i.e. 223.82, which means the deposit mobilization, is varying less rapidly than other
banks. Deposit mobilization of bank of Baroda from 2011 to 2015 reveals that there is a
nearly constant ratio of total deposits to total liability. As far as growth in different deposits is
concerned the CAGR for current deposit is 23% followed by term deposit 20.19%. Savings
deposit shows a very compound average growth rate of 14.34%. This reveals that the bank is
unable to attract customers for saving deposits. There is a significant increase in current
deposit and term deposit over the period under study. Therefore there is a well mobilization
of demand deposit and term deposits by bank of Baroda over the period. The CAGR of total
deposits of BOB is higher than Axis Bank. Though there is a marginal difference between
BOB and Axis Bank in respect of women customers, Axis Bank has depositors from business
sector. It means that the potential of Axis Bank depositors is not much as Employee
depositors. Further, the percentage of unemployed/retired is 18.18% in BOB and 19.05% in
Axis Bank which reveals that the possibility of mobilizing term deposits is more for Axis
Bank than BOB. The average operation of each type of account by the respective depositor is
very much high in case of current deposit account because they are used by which
Businessman and administrative Agencies. The “average operations” of current deposit
account deposit per month is 2.56 in BOB and it is 3.31 in Axis bank which is far higher than
any other account of course the recurring deposit account is operated once in a month per
account holder. Hence, it is to be concluded that cost of servicing of current deposit account
is likely to be more than the operation of any other deposit account. So such accounts are
charged with service charges at a particular rate to the current deposit account concerned.
Providing the facilities may help the customers to transact with their bank without moving
24
from their offices and homes. ATM is used more frequently than any other electronic devices.
The use of ATM customer is 1.66 in BOB where as it is 1.38 by the depositors of Axis Bank,
soon can conclude that among all the electronic devices ATM is highly popular. Internet
banking rank in both the banks with an average weight of a 0.31 and 0.51in BOB and Axis
Bank respectively it means that the customers of Axis Bank are using the Internet banking
more frequently than by the depositors of BOB. There is significant decline in deposits in
scheduled commercial banks in Bhubaneswar during the period from 2009-10 to 2012-13. As
there is a significant increase in current deposit and term deposit over the period under study,
the mobilization of demand deposit and term deposits by bank of Baroda is more than Axis
bank over the period. On the whole, it is concluded that Bank of Baroda in Bhubaneswar city
has performed well in deposit mobilization in five years from 2010-11to 2014-15 than its
counterpart (Maharana, Choudhury and Ashok Panigrahi, 2015).
Azolibe (2019) critically examined the nexus between macroeconomic dynamics, bank-
specific factors and deposit mobilization of the Nigerian banking sector which is ex-post
facto, relied mostly on secondary data which were collected through the Central Bank of
Nigeria (CBN) and National Bureau of Statistics (NBS) statistical bulletin from 1985-2018.
His findings revealed among others that inflation rate measured by the consumer price index
and deposit interest rate have negative and significant relationship with deposit mobilization
in Nigeria. Exchange rate, unemployment rate and loan-to deposit ratio have negative and
insignificant relationship. Lending rate and Government expenditure have insignificant
positive relationship while it was only Gross domestic product and numbers of bank branches
have positive and significant relationship with deposit mobilization in Nigeria.
Ketema Getachew (2017) empirically examined the determinants of commercial banks

deposit mobilization in Ethiopia for the periods 2000-2015. From total of seventeen
Commercial Banks which are engaged in commercial bank activities, seven selected based on
the historical time formation of banks. The researcher adopted quantitative research
approach. The results reveal that credit risk, exchange rate, and Bank Profitability are
positively and statistically significant on bank deposit growth; whereas, Loan to Deposit ratio
(Bank’s Liquidity) and Money Supply influence is negatively and statistically significant on
bank deposit growth. Deposit Interest Rate had insignificant positive influence on bank
deposit growth whereas inflation and government expenditure had insignificant negative
influence on bank deposit growth (Ketema Getachew, 2017).
25
Samuel Tesfahunegn (2015) intended to identify the challenges in deposit mobilization for
private banks in Ethiopia by concentrating the case on Awash Bank S.C, Descriptive method
particularly survey design approach was adopted for the study. The survey was conducted
with staff individuals working in Awash Bank S.C at different positions using questionnaire.
In addition, the study used unstructured review of documents and records held by other
commercial banks and NBE. The findings of the study show that AB and other private banks
are operating in a dynamic and highly competitive environment and there is high possibility
of catch-up and by-pass among these banks. Also, private commercial banks should prepare
for the inevitable stiff competition that will arise from local and with the eminent future
entrant of foreign banks. By doing so, they can solve the paradox of the liquidity problem and
the unbanked resources (Samuel Tesfahunegn, 2015).
Kibebe Gerawork (2016) tried to determine factors that affect deposit mobilization, the
associated costs of deposit mobilization in private banks. Therefore, the study adopts mixed
approach to gather the data. The primary data is gathered using questionnaire. Sampling
method of the primary data is purposive sampling technique. While the secondary sources of
data were extracted from annual reports of all private commercial banks of Ethiopia, data
from National Bank of Ethiopia (NBE) and from Central Statistical Authority (CSA). The
study shows that age dependency ratio, investment and money supply, are the most
significant factors of deposit mobilization activity. The other variable such as Per capita
income has insignificant power to influence the dependent variable (Kibebe Gerawork, 2016)
An independent study conducted by Fekadu Yosef (2019) aimed to examine the factors
affecting deposit mobilization of Dashen Bank specifically on branches of Addis Ababa using
Quantitative and qualitative research approach by focusing on five years deposit performance
of the bank as indicator of its extent of deposit mobilization. He found that the five years
deposit performance of the bank indicates that total deposits of each year increased because
the bank worked hard on branch expansion which is identified in this study as one of the
independent variables that contributed for deposit mobilization. Moreover, his findings show
that there is a relationship between the dependent variable (deposit) and independent variable;
and the correlation test results reveal that independent variables such as Service Quality,
Branch Expansion, Interest Rate, Technology, Disposable Income and Market strategy are
positively and statistically significant on the bank deposit growth.
26
Rahel Tesfaye and Maru Shete (2015) examined the determinants of financial performance of
a private commercial bank by using the monthly financial statement of Bank “X” from 2011
to 2016 by adopting a quantitative research approach that focused on examining only internal
factors such as capital adequacy, loan to deposit ratio, income diversification, operating
efficiency, export, liquidity, loan performance and deposit mobilization as explanatory
variables; and return on asset, return on equity and net interest margin as dependent variables
to measure the financial performance of the bank. The finding of the study revealed that
income diversification, deposit amount, export level and loan performance have a significant
influence on the financial performance of Bank “X”.
Tagel Tegenu (2015) carried out the study with the aim of examining factors influencing
deposits mobilization in private commercial banks and specifically to evaluate the impact of
awareness creation, interest rate, branch expansion and technology on deposit mobilization
applying case study employing a quota sampling technique, where 46 bank staff were
sampled and selected as representatives in that study from Arba Minch town. The results
from the analysis of bank officials’ shows that awareness creation and branch expansion,
interest rate and service level and technology used are among the most important factors to
facilitate deposit mobilization.
Begashaw D. Woldemichael (2010) performed an empirical study on the topic entitled

“Deposit mobilization performance of Ethiopian microfinance institutions: Challenges and
prospects” and his findings show that contrary to the Ethiopian microfinance industry has a
proven track record in achieving a larger outreach and fast growth, these performance and
growth in terms of credit provision has not been coupled with mobilizing deposit; despite the
industry has been endorsed to mobilize deposit from the public and many evidence showing
the capacity of the poor as a saver.
2.3. Knowledge Gaps

Mobilization of deposits is one of the important functions of banking business. It is an
important source of working fund for the bank. Deposit mobilization is an indispensable
factor to increase the sources of the banks to serve effectively. Mobilization of deposit plays
an important role in providing satisfactory service to different sectors of the economy. The
success of the banking greatly lies on the deposit mobilization. Performances of the bank
depend on deposits, as the deposits are normally considered as a cost effective source of
working fund.
27
As it is discussed in the literature review part, most of the studies undertaken in our country
related to the topic of challenges and opportunities of deposit mobilization predominantly
focus on an individual bank and either limited to assessment of challenges or determinants or
factors affecting deposit mobilization. Accordingly, most studies investigated the
determinants of or challenges of or factors affecting deposit mobilization failed to distinguish
between challenges and opportunities of deposit mobilization; and none made comparative
study on the challenges and opportunities of deposit mobilization using two banks as case
examples so far. Thus, the inconsistency of findings among researchers and little attention
given by researcher to comparatively examining the challenges and opportunities of deposit
mobilization using two different banks in Ethiopia in general and in Adama city in particular,
motivated the researcher to undertake a research in this particular area by adding new
additional variable to fill these identified gaps in the literature.
2.4. Conceptual Framework and Hyporesearch work of the study

2.4.1. Conceptual Framework
In developing countries, the rate of saving is quite low and existing banks are half successful
in mobilizing deposits such savings as the income of most people is very low, and in effect,
current income or disposable income is mostly spent to maintain a subsistence level of
consumption. Investment on the other hand is a core for the national economy. The banking
system is the integral part of investment system in the productive sector and a backbone of
national economic growth. Investment involves the sacrifice of current birr for future better
value birr. Banking therefore, is concerned with encouraging present savings for future
reward. When people deposit money, bank must invest the money in new ventures that
increase their revenue. Hence, the primary objective of these two banks is attracting
depositors to prefer their bank over others by providing quality services and other variables to
carryon different deposit related transactions.
Quality customer service among others is critical to keep competitive position of a bank in
the industry. It is obvious that a sound and profitable bank is able to endure negative shocks
and stand to be sustainable in the industry. High interest rates will always motivate most non
affluent customers to save more while low interest will discourage savings. Hence, parallel to
resource mobilization, good bank performance rewards the shareholders with sufficient return
for their investment also pay high interest to depositors to encourage further deposits. The
growth of any economy depends on capital accumulation, which in turn depends on
28
investment and an equivalent amount of savings to match the investment. Both private and
public banks regularly study how to stimulate investment and increase the level of saving to
fund increased investment.
According to Martin (2013), financial literacy can be viewed as an important potential

outcome of savings programs. However, lack of basic education including financial literacy
can also impede the establishment of such savings programs in the first place, leading to low
uptake and usage rates. Part of the difficulty may be due to low literacy rates in most of the
developing world. The survey on the strategies and the trends in deposit mobilization of
Awash Bank, S. C. and Cooperative Bank of Oromia, S. C in Adama city will be assessed
and identified.
Therefore, assessing the challenges and opportunities of deposit mobilization of Awash Bank,
S. C. and Cooperative Bank of Oromia, S. C and providing solutions to optimize its functions
can make a substantial contribution to the economic development of the country; and also
rewards shareholders with sufficient return, and prevent the wasteful of resources utilization.
In this study the conceptual scheme of the relationship between the dependent variable
(deposit mobilization of Awash Bank, S. C. and Cooperative Bank of Oromia, S. C and levels
of deposits mobilized) and independent variables (external or country specific factors and
internal or bank specific factors that constitute challenges and opportunities) is depicted as
illustrated on the next page.
29
Independent Variable I: Independent Variable II

Dependent Variable
Challenges
Internal Factors
Human capital,
External Factors Deposit Mobilization Management quality,
Inflation, Product Differentiation,
levels by Bank ‘X’
Population growth, Deposits Interest Rate,
Per capita income, Where, Branch Expansion,
Shocks, Bank ‘X’ refers to: Service Quality,
Regulation, Appropriate Technology,
Public Awareness, Awash Bank, S.C., Profitability,
Political Instability, and/or Cooperative Market strategy,
Social Unrest, Market Competition,
Bank of Oromia, S.
And so on. Customer Relationship
C. Management,
Bank Cross-Selling,
And so on.
Opportunities
Figure 2.1: Conceptual Framework of the Study for a comparative analysis on the challenges
and opportunities of deposit mobilization by both banks in Adama city, 2020
Source: Author Model Designed Based on Literature Review
2.4.2. Hyporesearch work of the study
(H1): There is no difference between levels of deposits mobilized by branches of Awash
Bank, S. C. and Cooperative Bank of Oromia, S. C in Adama city.
(H2): Both banks’ branches operate equally effectively in mobilizing deposits in Adama city.
(H3): There are no differences between challenges of deposits mobilization of the branches
of Awash Bank, S. C. and Cooperative Bank of Oromia, S. C in Adama city.
(H4): There are no differences between the opportunities of deposits mobilization of the
branches of Awash Bank, S. C. and Cooperative Bank of Oromia, S. C in Adama city.
30
CHAPTER THREE
3: RESEARCH METHODOLOGY
3.0. Introduction
In this chapter, a blueprint for the collection, measurement and analysis of data are dealt with.
It briefly presents the research methodology that will be used in this study. The sections
under the chapter state the approach and design that were used in the research, sampling
methods and data gathering tools. It also describes the variables that were used in the study.
Moreover, the chapter reveals an overall scheme, plan or structure conceived to the
researcher in answering the specific objectives of the study and in testing the research
hypotheses. In this stage most decisions about how research executed and how respondents
were approached, as well as when, where and how the research was completed is discussed.
Therefore, in general, this part of the study described the research design and methodology
that were used to guide under the following sub-sections: the research design, target
population, sample size and sampling technique, data collection instrument, variables and
measures, data analysis technique and ethical considerations.
3.1. Research Methodology, Approach and Design

Research method is the process used to collect information and data for the purpose of
making business decisions. The methodology included questionnaires, surveys and other
research techniques. The research methodology can be qualitative, quantitative or mixed
approach in nature that provide solutions for research questions and/or research problem.
Also help management to insight on existing problems and to devise ways to overcome the
problems. The researcher in this study used authentic or genuine sources to collect data that
were helpful to complete the research successfully. Research design is the set of methods and
procedures used in collecting and analyzing measures of the variables specified in the
research problem part of the research. The researcher selected the research design based on
purpose for the study; because it was very comprehensive and helped to explain the research
plan more clearly. In this study, descriptive research approach for valid representation of
independent and dependent variables were employed. A framework that was created to find
answers to research questions was made. The researcher used SPSS Version 21 to analyze,
interpret, and recommend output based on data collected. The descriptive research design was
used in this study that provided accurate and valid representation of the factors or variables
that were relevant to research questions; such as opportunities that contribute to deposit
31
mobilization and challenges that hinder bank’s deposit mobilization efforts were explained
well.
The research approach that was used in this study was quantitative data that provided
solutions of the research questions as description of the problem required quantitative data or
information. Since, the data collected by the researcher were quantitative in nature;
appropriate research approach was used for the study. Both primary and secondary data were
used in the research to provide better solution through analysis. The main objective of the
study was to assess the challenges and opportunities of deposit mobilization and levels of
deposit mobilization of Awash Bank, S. C. and Cooperative Bank of Oromia, S. C. branches
of Adama city in the previous five consecutive fiscal years of operation. To meet the
objectives of the study, five years panel or portion of data was taken for the study.
Therefore, a cross-sectional descriptive survey research design was employed for conducting
this research work. All items of the instruments were used to sought answers for the stated
research questions and as such there was no any tool developed specifically and only for a
single research question at all.
3.2. Types and Sources of Data

The study was based on primary and secondary sources of data. The required primary data
was obtained through the questionnaire whereas the secondary data was obtained by
reviewing journals, annual reports, periodicals and literature sources on challenges and
opportunities of deposit mobilization. Moreover, additional data was collected on various
issues from annual bulletins of the National Bank of Ethiopia, annual reports of Awash Bank
S.C, Proclamations and regulations related to banking and finance, directives issued by the
Monetary Authority, and other relevant sources.
3.3. Population, Sampling Techniques and Sample Sizes

The target populations of the study comprised of Awash Bank S.C. and Cooperative Bank of
Oromia S.C.’s branch managers, senior customer service officers and members of deposit
mobilization teams of Adama city.
3.3.1. Study Population

All managers and/or assistant managers of the branches, all senior customer service officers
and all members of deposit mobilization teams constituted the study populations of the study.
32
Accordingly, there were 45 branch managers, senior customer service officers and members
of deposit mobilization teams of Cooperative Bank of Oromia, S. C. and 64 branch managers,
senior customer service officers and members of deposit mobilization teams of Awash Bank,
S. C. of Adama city. Thus, the total populations of the study were 109 branch managers,
senior customer service officers and members of deposit mobilization teams altogether.
3.3.2. Sampling Techniques

Two major methods for selecting a sample, namely, probability and non-probability sampling
techniques were applied. In probability sampling, a sample was selected using random
selection so that each unit in the population had equal opportunity to enter to the sample
whereas non-probability sampling technique was applied to capture the experiences and
lessons learned by the managers and/or assistant managers, and the marketers of the branches
regarding deposit mobilization. Accordingly, the senior customer service officers were
sampled using simple random sampling technique; the managers and/or assistant managers of
the branches of the two banks were selected using purposive sampling technique. The
members of deposit mobilization teams or the marketers were selected using availability
sampling technique. All branches of both banks in Adama city were covered in the study
using census sampling techniques. Therefore, the sampling techniques that were applied
included purposive, simple random, availability and census sampling techniques.
3.3.3. Sample Size Determination

The sample size that was required for the study was determined using sample size
determination formula for single proportion population (Pagano, 2009); i.e.,
Z 2  * p*q
1
n 2
, Where
d2
n  Sample size of respondents,
Z  The value of normal population distribution at 95% level of confidence, which is equal
to 1.96,
p  The probability to randomly select a respondent; and as it is simple random its value is
0.5,
q  The probability of not randomly selecting a respondent; 1-p = 0.5, and
d  Magnitude of sampling bias which is equal to = 0.05.
So,
33
1.962 * 0.5 * 0.5

n 
0.052
= 384 respondents
However, since the total number of study population was 109 which was less than ten
thousand, the study population was finite. So, the calculated sample size needed adjustment
for final population. Pagano’s (2009) adjustment formula for finite population was used in
this study, i.e.,
n
na  , Where
n
1
N
n  Sample size of respondents,
na  Adjusted sample size of the respondents
N  Total number of target population of the study of the two banks’ branches,
Substituting the values for the variables in the formula, we get that
384
na 
384
1
109
= 85
Therefore, the adjusted sample size of the respondents was 85 respondents that constituted
branch managers, senior customer service officers and members of deposit mobilization
teams of the two banks.
The final sample size with 10% non-response rate or missing data was equal to 94
respondents. The determined final sample size of the respondents was proportionately
distributed to gender, the two banks and their corresponding numbers of branch managers,
senior customer service officers and members of deposit mobilization teams based on their
corresponding sizes (Table 3.1).
Table 3.1: Numbers of study participants and their corresponding sample sizes for both
banks’ branches and for overall branches in Adama City, 2020
SN Branch name Number of participants Si
I CBO, S.C BM ABM CSO DMTMO T BM ABM CSO DMTMO T
1 Adama Branch 1 1 2 1 5 1 1 2 1 5
2 Torban Obo Branch 1 1 2 1 5 1 1 1 1 4
3 Hawas Branch 1 1 2 1 5 1 1 1 1 4
4 Boku Shanan Branch 1 1 1 1 4 1 1 1 1 4
5 Dhaka Adi Branch 1 1 1 1 4 1 1 1 1 4
6 Qurqura Branch 1 1 1 1 3 1 1 1 1 4
34
7 Derartu Tullu Branch 1 0 2 1 3 1 0 1 1 3

8 Ketechema Branch 1 0 1 1 3 1 0 1 1 3
9 Chaffe Branch 1 0 1 1 3 1 0 1 0 2
10 Dhadacha Arara Branch 1 0 1 1 3 1 0 0 0 1
11 Dabe Soloke Branch 1 0 1 1 3 1 0 1 0 2
12 Total 11 6 15 11 43 11 6 11 8 36
II AB, S.C
1 Adama Branch 1 1 3 4 9 1 1 3 3 8
2 Dembela Branch 1 1 3 3 8 1 1 3 3 8
3 Ketechema Branch 1 0 3 3 7 1 0 3 2 6
4 Boset Branch 1 0 3 3 7 1 0 3 2 6
5 Barecha Branch 1 0 3 3 7 1 0 3 2 6
6 Sartera Branch 1 0 3 3 7 1 0 3 2 6
7 Derartu Adebabay Branch 1 0 3 3 7 1 0 3 2 6
8 Ganda Hara Branch 1 0 3 2 6 1 0 2 1 4
9 Adama Ras Branch 1 0 2 2 5 1 0 2 1 4
10 Boku Shanan Branch 1 0 2 2 5 1 0 2 1 4
11 Total 10 2 28 28 68 10 2 27 19 58
III Overall Total 21 8 39 39 111 21 10 37 36 94
Key: BM = Branch manager; ABM = Assistant branch manager; CSO = Customer service officers; DMTMO =
Deposit mobilization team members and others.
3.4. Variables of the study

3.4.1. Dependent Variables
The dependent variables of the study included Deposit Mobilization levels by Awash Bank
(S.C) and Cooperative Bank of Oromia (S.C) and their effectiveness in deposit mobilization
3.4.2. Independent Variables
The independent variables of the study comprised of:
Socio-demographic characteristics of the respondents,
External factors such as inflation, population growth, per capita income, shocks, regulation,
public awareness, political instability, social unrest, and so on, and
Internal factors like human capital, management quality, product differentiation, deposits
interest rate, branch expansion, service quality, appropriate technology, profitability, market
strategy, market competition, customer relationship management, bank cross-selling, and so
on.
3.5. Data Collection Instruments
The study employed semi-structured questionnaire as the main instrument of data collection.
Most of the items of the instrument used for data collection were adapted from instruments
previously used by other researchers (Ketema Getachew, 2017; Samuel Tesfahunegn, 2015;
35
Kibebe Gerawork, 2016; Pesa and Muturi, 2015; Fekadu Yosef, 2019) while some items were
developed based on reviewed literature.
Semi-structured questionnaire consisting of seventy-five items was administered to branch

managers, senior customer service officers and members of deposit mobilization teams of
Cooperative Bank of Oromia, S. C. and Awash Bank, S. C. of Adama city. The questionnaire
contained three parts. The first part of the questionnaire was used to collect data on the socio-
demographic characteristics of the respondents and consisted of four items. The second part
was used to gather data on general determinants of deposit mobilization and comprised of 12
items. The final part of the instrument was applied to collect data on further determinants;
i.e., the challenges and opportunities of deposit mobilization and had 59 question items.
3.6. Validity and Reliability of the Research Instruments

To ascertain the content, face, internal and construction validities of the questionnaire, they
were forwarded to the advisor. The validity of the instruments was approved by the advisor
and the RVU’s Ethical Board. Furthermore, validity of the questionnaire was checked by
professional colleagues in the area. However, to verify the reliability of the questionnaire, a
pilot test was carried out. That was done by administering the questionnaire to 10 percent of
the computed sample size of the study to the branch managers, senior customer service
officers and members of deposit mobilization teams of CBO S.C. and AB S.C. branches of
Bishoftu town. Reliability of the items was calculated by using Cronbach’s Alpha to check
the consistency of the items as according to McMillan and Schumacher (2010). The
reliabilities of the research instruments was determined using Cronbach’s alpha value as the
Cronbach’s alpha is generally the most appropriate form of reliability for survey research
questionnaires in which there was a range of possible answer for each item (a scaled response
such as in questionnaire used in this study); in line with this, some items were modified.
Finally, items with Cronbach’s alpha value greater than or equal to 0.70 were considered
reliable.
Table 3.2 below illustrates the reliabilities or Cronbach’s alpha values for all parts and sub-
sections separately and the overall value of Cronbach’s alpha for the items of the instruments
used in this research work. Accordingly, part one items have Cronbach’s alpha value of
0.992; the second part items have Cronbach’s alpha value of 0.834; the first sub-section of
part three of the instrument items have Cronbach’s alpha value of 0.891; and the second sub-
section items have Cronbach’s alpha value of 0.855. The overall value of Cronbach’s alpha
36
for the items of the instrument was 0.872 (Table 3.2). Therefore, all items used in the study
were reliable and valid.
Table 3.2: Parts of the instrument and their reliability per category and overall
SN Parts No. of items Alpha
1 Part I: Socio-demographic Part 4 0.992
2 Part II: General Information on Deposit 12 0.834
3 Part III; Sub-Section A: Close-ended Challenge and 28 (23Qns) 0.891
Mobilization
Opportunity Items
4 Part III; Sub-Section A: Five Point Differential 36 0.855
5 Overall
Likert Scale Items 80 0.872
3.7. Data Analysis Techniques

Data was analyzed by using descriptive and inferential statistics. Descriptive statistics
involved the use of measures of central tendency such as means, medians and modes as well
as measures of variability like standard deviations, variances and ranges. Inferential statistics
were used to determine whether items included in the questionnaire were an opportunity or a
challenges for the banks that were addressed in the study to mobilize deposits and also to
evaluate whether the extent of the challenges impeding and opportunities reinforcing deposit
mobilization were different, the same or extremely divergent implying that an item which
was an opportunity for one of the bank was a challenge for the other one and vice versa.
Organized, processed and edited data was analyzed using Statistical Package for Social
Science (SPSS Version 21) for Windows. Two-way analysis of variance (2-ANOVA) was
used to evaluate whether the self-reported factors were similar or differ between the two
banks in terms of the factors of considerations. Again, t-test statistic was utilized to determine
whether average amounts of mobilized deposits in the three years of panel and effectiveness
of deposit mobilization by Awash Bank, S. C. and Cooperative Bank of Oromia, S. C. were
the same or significantly differ; and the level of significance was judged based on p-value
which was less than or equal to 0.05 for two-tailed test. Lastly, analyzed data was presented
using descriptive accounts, pictorial representations, frequency tables, charts and verbal
description of the results and their accounts.
3.8. Ethical considerations

Necessary ethical clearance was obtained from Rift Valley University and required letters to
whom it concerned was obtained from all relevant offices in order to execute data collection
and conduct the study. Items of the questionnaire and other forms were stated (worded) in
such a way that they were free from religious, ethnic and gender biases. All the research
37
participants that were included in this study were informed appropriately about the purpose of
the research and their willingness and consent were secured before the commencement of
data collection and distribution of the questionnaires. The right to privacy of the respondents
and the confidentiality of the identity of each participant were maintained. In all cases, the
privacy of the respondents was kept confidential. Actual procedure of data collection
proceeded after written consents of the participants were obtained.
38
CHAPTER FOUR
4: DATA ANALYSES, PRESENTATION AND INTERPRETATIONS
4.0. Introduction
This chapter presents collected data and results of data from data that were gathered from the
branch managers, senior customer service officers and members of deposit mobilization teams
of Awash Bank (S.C) and Cooperative Bank of Oromia (S.C) branches of the Adama city in
2012 [2019/20] fiscal year. The data was obtained through semi-structured questionnaire. The
results of the study are presented in six sub-sections detailed, described and illustrated below.
4.1. Response Rate of the Study

The researcher targeted a sample size of 94 branch managers, senior customer service officers
and members of deposit mobilization teams of Awash Bank (S.C) and Cooperative Bank of
Oromia (S.C) branches of the Adama city, all of them were responded. This represents a 100
percent response rate.
4.2. Socio-demographic Characteristics of Respondents
Table 4.1: Socio-demographic features of the respondents of both banks’ branches in
SN ITEM Indicators Responses by bank types in
AB SC CBO SC Both Banks
Freq. Percent Freq Percent Freq Percent Cum. Percent
. .
1 Sex Female 17 29.31 8 22.22 25 26.60 26.60
Male 41 70.69 28 77.78 69 73.40 100.0
Total 58 100 36 100 94 100.0
2 Educational Diploma 2 3.45 0 0.00 2 2.10 2.10
status First degree 55 94.83 31 86.11 86 91.50 93.60
Second degree+ 1 1.72 5 13.89 6 6.40 100
Total 58 100 36 100 94 100.0
3 Years of 1 to 3 years 1 1.72 7 19.44 8 8.50 8.50
4 to 6years 23 39.66 13 36.11 36 38.30 46.80
work
7 to 10 years 22 37.93 7 19.44 29 30.90 77.70
experience 11 to 13 years 9 15.52 8 22.22 17 18.10 95.70
Above 13 years 3 5.17 1 2.78 4 4.30 100
Total 58 100 36 100 94 100.0
4 Job Title Branch Manager 12 20.69 8 22.22 20 21.30 21.30
Assistant branch 9 15.52 3 8.33 12 12.80 34.00
manager
Senior Customer 10 17.24 17 47.22 27 28.70 62.80
Service Officer
Deposit Mobilizing 16 27.59 5 13.89 21 22.30 85.10
Team Member
Marketer 11 18.97 3 8.33 14 14.90 100
Total 58 100 36 22.22 94 100.0
Source: Author Survey Data (2020)
39
In aggregate, most 69(73.40%) of the selected respondents were males while the rest were
females. In relation to the educational status of the respondents, graduates were 86 (91.50%),
second degree holders were 6(6.40%) and diploma holders were 2.10 percent. See the table
for other socio-demographic variables and corresponding percentage values as a function of
bank types (Table 4.1).
38.30%
40.00%
35.00%
30.90%
30.00% Banks AB SC
24.47% Banks CBO SC
23.40%
25.00%
Banks Both
20.00% 18.10%
13.83%
15.00%
8.50% 9.57%
8.51%
10.00% 7.45% 7.45%
4.30%
5.00% 3.19%
1.06% 1.06%
0.00%
1 to 3 years 4 to 6years 7 to 10 years 11 to 13 years Above 13 years
Figure 4.1: Years of work experiences of the respondents in Adama city, 2020(94)
In accordance to the years of the work experiences of the respondents per each bank and both
banks, those with 4-6 years of work experiences were 36(38.30%) for both banks while they
were 25(24.47%) for Awash Bank (S.C) and 11(13.83%) for CBO, S.C; those that had 7-10
years of work experiences were 29(30.90%) for both while they were 22(23.40%) for AB,
S.C and 7(7.45%) for CBO, S.C; and those respondents who had 11-13 years of work
experiences were 17(18.10%) for both whereas they were 10(9.57%) for AB, S.C and they
were 7(8.51%) for CBO, S.C correspondingly (Table 4.1 and Figure 4.1 above). From these
findings, one could easily infer that having employees that have higher years of work
experiences is an opportunity for Awash Bank (S.C) while it is a challenge for cooperative
bank of Oromia (S.C).
40
14.90%
Deposit Mobilizing Team Member 3.19%
'X' 11.70%
22.30%
Chief of Deposit Mobilizing Team 5.32%
Member 17.02%
28.70%
Senior Customer Service Officer 18.09%
10.64%
12.80%
Assistant branch manager 3.19%
9.57%
21.30%
Branch Manager 8.51%
Banks Both 12.77%
Banks CBO SC
Banks AB SC 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00%
Figure 4.2: The respondents’ job title per bank type and in aggregate in Adama city,
2020(94)
In line with the job titles of the respondents by bank type and in aggregate for both banks,
branch managers for both banks were 20(21.30%) but 13(12.77%) of them were from AB,
S.C while 7(8.51%) were from CBO, S.C accordingly. Nine (9.57%) and 3(3.19%) of the
assistant branch managers were from AB, S.C and CBO, S.C respectively resulting in
12(12.80%) in aggregate for both banks. Similarly, 10(10.64%) and 17(18.09%) of the senior
customer service officers were from AB, S.C and CBO, S.C correspondingly that resulted in
27(28.72%) for both banks operating in Adama city. The types of job titles of the rest
respondents of are presented in Table 4.1 and Figure 4.2 (Table 4.1 and Figure 4.2). From
these findings, one could easily infer that having employees holding better job titles is an
opportunity for Awash Bank (S.C) while it is a challenge for cooperative bank of Oromia
(S.C).
41
100.00% 91.50%
90.00%
80.00%
70.00%
58.51%
60.00%
50.00%
40.00% 32.98%
30.00%
20.00%
5.32% 6.40%
10.00% 2.13% 1.06% 0.00% 2.10%
0.00%
AB SC CBO SC Both
Diploma
Banks First Degree
Master’s Degree and higher
Figure 4.3: Respondents’ job title by bank type & in aggregate in Adama city, 2020(94)
Figure 4.3 depicts the highest levels of educational qualification attainments of the
respondents as a function of the bank types and in aggregate those were operating in Adama
city and the percentage points reflected the status per bank type and as an aggregate and
hence percentage values lower for AB, S.C attributes to the fact that large numbers of the
participants were from this bank. As clearly evident from the figure, predominant of the first
degree holders who participated in the study were from AB, S.C (55(58.51%) but in the case
of second degree qualifications, the numbers and percentage points for CBO were 5(5.32%)
while it was 1(1.06%) for AB, S.C correspondingly (Table 4.1 and Figure 4.3). The fact that
both banks’ branches have employed staffs with comparable educational qualification might
be either an opportunity for both or the potential challenges for both of them.
42
4.3. Amounts and Levels of Mobilized Deposits by the Types and Banks
Table 4.2: Levels of deposit mobilization by banks’ branches in Adama city, 2020(94)
Adama city Branches of
Awash Bank (S.C) Cooperative Bank of Oromia (S.C) Both Banks
Demand Saving Demand Saving Demand Saving

Types Both Both Both
deposit deposit deposit deposit deposit deposit
ni 58 58 58 36 36 36 94 94 94
Mean 95867722.4 203785500.0 299653222.4 54565000.0 127277777.78 181846666.67 80049658.51 174484670.21 254535818.09
SD 17302909.548 36782411.063 54085320.220 55802653.419 130228139.972 186028554.367 41986444.451 92789315.595 134653947.596
Median 92855000.00 197403000.00 290258000.00 36960000.00 86040000.00 123000000.00 86773000.00 184448000.00 271221000.00

Keys: ni = Numbers of respondents from each bank’s branches in Adama city
The mean and median amounts of overall deposits mobilized by the branches of the two
banks were 254, 535, 818.10 [254, 535, 818.10±134, 653, 947.60] and 271,221, 000 ETB
respectively; and ranged from 33, 650, 000 to 546, 210, 000. Out of the total selected
branches of both banks operating in Adama city, 17.02 percent were low deposit mobilizers
while 73.40 percent were medium deposit mobilizers and the rest were high deposit
mobilizers (9.57%) on the bases cut-off values calculated as mean plus or minus one standard
deviation, and twice of standard deviation.
On the average, the overall amount of deposits mobilized by Awash Bank (S.C) (299, 653,
222.41 ± 54, 085, 320.220) was greater than the average amount of deposits mobilized by
Cooperative Bank of Oromia (S.C) (181, 846, 666.67 186, 028, 554.367) over the past three
fiscal years.
Table 4.3: Levels of deposits mobilized by the banks and types in Adama city, 2020(94)
Deposit types Ranked levels Bank name Total ni(%)
AB SC ni(%) CBO SC ni(%)
Demand deposit performance Low 0(0.00) 20(55.56) 20(21.28)
Medium 49(84.48) 9(25.00) 58(61.70)
High 9(15.52) 7(19.44) 16(17.02)
Total 58(100) 36(100) 94(100)
Saving deposit performance Low 0(0.00) 16(44.44) 16(17.02)
Medium 49(84.48) 13(36.11) 62(65.96)
High 9(15.52) 7(19.44) 16(17.02)
Total 58(100) 36(100) 94(100)
Total deposit performance Low 0(0.00) 16(44.44) 16(17.02)
Medium 49(84.48) 20(55.56) 69(73.40)
High 9(15.52) 0(0.00) 9(9.57)
Total 58(100) 36(100) 94(100)
43
The deposit mobilization levels of AB, S.C were mostly medium [49(84.48%)] and high
[9(15.52%)] for both demand deposit and saving deposit as well as overall deposit
performance while that of CBO, S.C were low [20(55.56%)], and medium [9(25%)] for
demand deposit performance; for saving deposit performance were low [16(44.44%)] and
medium [13(36.11%)]; and for both types were low [16(44.44%)] and medium [20(55.56%)]
respectively. In aggregate, levels of deposit mobilizations of both banks’ branches in Adama
city were predominantly medium [69(73.40%)] followed by low [16(17.02%)] consecutively
(Table 4.3).
Total deposit mobilization performance level of Awash Bank (S.C) ranked medium and high
(100%) were greater than that of Cooperative Bank of Oromia (S.C) ranking medium and
high (55.56%) (See Table 4.3 for the details).
Previously reported findings of several independent studies show that the challenges of
deposit mobilization facing banks vary from one bank to another, and even within the same
bank, they vary from one branch to another; and the same holds true in the case of
opportunities of deposit mobilization. Statistics of the National Bank of Ethiopia (NBE)
describe that there are differences in levels of deposit mobilization that vary as a function of
challenges and opportunities among governmental commercial banks, cooperative banks and
other privately owned and operating banks across the country and also at regional and local
levels (NBE, 2019). The report also emphasizes that challenges and opportunities of these
banks in mobilizing deposits are not the same. For instance, mobilizing deposits from
primary Farmers’ Cooperatives and their Unions, that stays for longer periods as compared to
deposits mobilized from individuals reported as an opportunity for Cooperative Bank of
Oromia unlike other privately owned banks (NBE, 2019). By the same token, it is found that
the amounts and levels of overall deposits mobilized by the branches of the two banks in
Adama city have significant differences over the last three fiscal years.
44
Again, t-test statistic was utilized to determine whether average amounts of mobilized
deposits in the three years panel and effectiveness of deposit mobilization by Awash Bank, S.
C. and Cooperative Bank of Oromia, S. C. were the same or significantly differ; and the level
of significance was judged based on p-value which was less than or equal to 0.05 for two-
tailed test.
Table 4.4: Means, standard deviations and standard errors of the means for each types
and total deposits mobilized by the two banks in Adama city, 2020(94)
Group Statistics
Bank name N Mean Std. Deviation Std. Error Mean
AB SC 58 95, 867, 722.41 17, 302, 909.548 2, 271, 983.331
SumDD
CBO SC 36 54, 565, 000.00 55, 802, 653.419 9, 300, 442.236
AB SC 58 203,785, 500.00 36, 782, 411.063 4, 829, 767.189
SumSD
CBO SC 36 127, 277, 777.78 130, 228, 139.972 21, 704, 689.995
AB SC 58 299, 653, 222.41 54, 085, 320.220 7, 101, 750.468
SumBOTH
CBO SC 36 181, 846, 666.67 186, 028, 554.367 31, 004, 759.061
Table 4.5: Levene’s test for equality of variances and t-test for equality of the means for
each types and total deposits mobilized by the two banks in Adama city, 2020(94)
Independent Samples Test
Levene's Test for Equality of Variances t-test for Equality of Means
F Sig. t df Sig. ΔMean ΔStd. Error
Equal variances assumed 35.549 .000 5.259 92 .000 41302722.414 7853828.548

SumDD
Equal variances not assumed 4.314 39.216 .000 41302722.414 9573929.917
SumSD
SumBOTH

As clearly evident from the above two tables (Tables 4.4 and 4.5), there were statistically
significant differences between the mean values of Awash Bank’s and Cooperative Bank of
Oromia’s three years panel demand deposits mobilized (t 0.05, 92=5.259; and p-value =0.000),
that of saving deposits (t0.05, 92 = 4.223; and p-value =0.000), and that of the overall deposits
mobilized (t0.05, 92 = 4.537; and p-value =0.000) respectively under the assumption of the
equality of variances; and these held true under the assumptions of non-equality of the
variances too. Also, the Levene’s Test for Equality of Variances for the demand deposits (F =
35.549; p-value = 0.000), for the saving deposits (F = 39.259; p-value =0.000) and for the
aggregate deposits mobilized by the banks (F = 38.125; p-value = 0.000) correspondingly
45
under the assumption of the equality of variances; and these held true under the assumptions
of non-equality of the variances also. These findings demonstrate that Awash Bank is more
effective in mobilizing demand deposits, saving deposits and overall deposits than the
Cooperative Bank of Oromia.
17379886900
1.8E+10
1.6E+10
1.4E+10
1.2E+10
1E+10 7625609000 11819559000
4164946900 5589331000
8E+09 6546480000
6E+09 1396130000 2482670000
2996709000 2667680000
4E+09 3788614000 5034236000
977070000 1737620000 5560327900 4582000000
2E+09 1168237900 1867310000
419060000 7449100002591373000
1800717000
0 Both types of deposits
800370000 1964340000
AB CBO Saving Deposits
(S.C) (S.C) AB CBO Demand Deposits
(S.C) AB CBO
(S.C) (S.C) AB
2017/18 (S.C) CBO
2018/19 (S.C) (S.C)
2019/20
Years Overall
Demand
Deposits
Figure 4.4: Amounts and kinds of mobilized deposits by banks in Adama city, 2020(94)
As easily observable from the figure above (Figure 4.4), Awash Bank (S.C) was more
effective and efficient in terms of amounts of both kinds of mobilized deposits and their
amounts over the three years of panel in Adama city as compared to the Cooperative Bank of
Oromia (S.C).
4.4. Descriptive Statistics of Dependent and Independent Variables
4.4.1. Some Factors Affecting Deposit Mobilization
Table 4.6: Some factors affecting deposit mobilization by branches of Awash and
Oromia Cooperative Banks in Adama city, 2020(94)
SN Items Options Responses for
AB, S.C in CBO, S.C in Both in
ni (%) ni (%) ni (%)
201 Which group of customers are the Individual customers 53 91.38 17 47.22 70 74.47
most significant depositors of your
Business organizations 5 8.62 4 11.11 9 9.57
bank in terms of the size of deposits?
Government entity 0 0 1 2.78 1 1.06
Cooperative Unions 0 0 9 25 9 9.57
46
1 and 2 0 0 1 2.78 1 1.06
1 and 4 0 0 4 11.11 4 4.26

202 Which deposit type has the most Savings account deposits 28 48.28 27 75 55 58.51
significant deposit volume? Current account deposits 15 25.86 3 8.33 18 19.15
Fixed time deposits 15 25.86 4 11.11 19 20.21
1 and 2 0 0 1 2.78 1 1.06
1 and 3 0 0 1 2.78 1 1.06
204 Is your bank increasing the number No 10 17.24 5 13.89 15 15.96
of its branches every year in Adama
city? Yes 48 82.76 31 86.11 79 84.04
206 Does the volume of deposit Yes 58 100 34 94.44 92 97.87
mobilized by respective branches of
I don't know 0 0 2 5.56 2 2.13
your bank differ?
207 What do you think is the cause for Convenience of bank 6 10.34 12 33.33 18 19.15
the difference in deposit branch
Proximity to home or job 0 0 1 2.78 1 1.06
mobilization among the branches?
Provision of good 29 50 12 33.33 41 43.62
services
Awareness of the society 4 6.90 6 16.67 10 10.64
General appearance of 1 1.72 0 0 1 1.06
office & materials
Others 18 31.03 2 5.56 20 21.28
2 and 3 0 0 1 2.78 1 1.06
3 and 5 0 0 1 2.78 1 1.06
All of the above 0 0 1 2.78 1 1.06

211 Is the cost of mobilizing deposits No 23 39.66 8 22.22 31 32.98
increasing year to year?
Yes 35 60.34 28 77.78 63 67.02
The respondents were asked question on the group of customers who were the most
significant depositors of their bank in terms of the size of deposits. Accordingly, individual
customers were selected as the most significant depositors by respondents from Awash Bank
(S.C) representing 91.38 percent while only 47.22 percent of the participants from
Cooperative Bank of Oromia (S.C) rated individual customers as the most significant
depositors of their bank’s branches in Adama city. Business organizations accounted for 8.62
percent and 11.11 percent of the most significant depositors for Awash Bank (S.C) and
Cooperative Bank of Oromia (S.C) respectively. Unlike Awash Bank (S.C), Cooperative
Unions accounted for 25 percent of the most significant depositors in the case of Cooperative
Bank of Oromia (S.C). Again, in the case of Cooperative Bank of Oromia (S.C), 16.67
percent of the depositors represented the rest and the combinations of the former depositors
which were unique to branches of this bank only (Table 4.6).
From the foregoing descriptions, it is evident that there are differences between Cooperative
Bank of Oromia (S.C) and Awash Bank (S.C) in terms of the most important depositors. The
fact that Cooperative Unions deposit their deposits only in the Cooperative Bank of Oromia
(S.C) could be an opportunity for it while it is a challenge for Awash Bank (S.C) as the sum
of money mobilized and deposited by cooperative unions is large and stay in the bank for
longer period of time unlike other types of depositors.
47
In the survey instrument used for this study, the respondents were also asked the question
requesting which deposit types had the most significant deposit volumes in their bank’s
branches operating in Adama city. About 48 percent and 75 percent respondents replied that
it was a saving deposit that had the most significant deposit volume in Awash Bank (S.C) and
Cooperative Bank of Oromia (S.C) consecutively and was followed by current account
deposits and fixed time deposits in the case of Awash Bank (S.C) each of them representing
equally 25.86 percent of the volumes of deposits while it was followed by fixed time deposits
(11.11%) in the case of Cooperative Bank of Oromia (S.C). This revealed that Awash Bank
(S.C) is unable to attract customers for saving deposits as compared to the Cooperative Bank
of Oromia (S.C). From these findings one could easily conclude that there are differences
between the two banks in terms of deposit types which had the most significant deposit
volumes in their bank’s branches operating in Adama city over the past three years panels of
deposits mobilization. These findings are also consistent with previously reported study
findings done in India that showed that as far as growth in different deposits is concerned the
CAGR for current deposit is 23% followed by term deposit 20.19%. Savings deposit shows a
very compound average growth rate of 14.34%. This reveals that the bank is unable to attract
customers for saving deposits. The “average operations” of current deposit account deposit
per month is 2.56 in BOB and it is 3.31 in Axis bank which is far higher than any other
account of course the recurring deposit account is operated once in a month per account
holder. Hence, it is to be concluded that cost of servicing of current deposit account is likely
to be more than the operation of any other deposit account. There is significant decline in
deposits in scheduled commercial banks in Bhubaneswar during the period from 2009/10 to
2012/13. As there is a significant increase in current deposit and term deposit over the period
under study, the mobilization of demand deposit and term deposits by bank of Baroda is more
than Axis bank over the period. On the whole, it is concluded that Bank of Baroda in
Bhubaneswar city has performed well in deposit mobilization in five years from 2010/11 to
2014/15 than its counterpart (Maharana, Choudhury and Ashok Panigrahi, 2015) which is
comparable with Awash Bank (S.C) in the case of the findings of the present study.
A question was also asked to the respondents whether their banks were increasing the number
of their corresponding banks’ branches every year in Adama city. The responses of the
respondents indicated that 82.76 percent (for Awash Bank (S.C)) and 86.11 percent (for
Cooperative Bank of Oromia (S.C)) were yes correspondingly. This implies that both banks
are equally increasing their branches in Adama city with marginal higher extent for
Cooperative Bank of Oromia (S.C) as compared Awash Bank (S.C) (Table 4.6).
48
They attributed their reasons why both banks were increasing their branches in Adama city to
the following factors; namely, deposit mobilization, provision of loan facilities, to have a
large number of branches, to increase customer base and to collect foreign currency among
many other reasons as the most important factors in relation to the levels of overall deposit
mobilization performance (Table 4.7) and with regards to the types of banks (Table 4.8).
Table 4.7: Main reasons for the branch expansion for Awash and Oromia Cooperative
Banks in Adama city as a function of rank of total deposits mobilized, 2020(94)
Items Options Indicators Total deposit mobilized rank Total
Low Medium High
Deposit mobilization Count 13 17 0 30
% within $reasons1 43.3% 56.7% 0.0%
% within BDPERF 81.3% 24.6% 0.0%
% of Total 13.8% 18.1% 0.0% 31.9%

It gives loan facility Count 2 5 0 7
% within $reasons1 28.6% 71.4% 0.0%
% within BDPERF 12.5% 7.2% 0.0%
% of Total 2.1% 5.3% 0.0% 7.4%

To have a large Count 2 8 1 11
number of branches % within $reasons1 18.2% 72.7% 9.1%
% within BDPERF 12.5% 11.6% 11.1%
% of Total 2.1% 8.5% 1.1% 11.7%

Main reason for banks’ To increase customer Count 6 34 5 45
branch expansion base % within $reasons1 13.3% 75.6% 11.1%
% within BDPERF 37.5% 49.3% 55.6%
% of Total 6.4% 36.2% 5.3% 47.9%

To collect foreign Count 3 10 2 15
currency % within $reasons1 20.0% 66.7% 13.3%
% within BDPERF 18.8% 14.5% 22.2%
% of Total 3.2% 10.6% 2.1% 16.0%

Other reasons Count 3 15 1 19
% within $reasons1 15.8% 78.9% 5.3%
% within BDPERF 18.8% 21.7% 11.1%
% of Total 3.2% 16.0% 1.1% 20.2%
Count 16 69 9 94
Total
% of Total 17.0% 73.4% 9.6% 100.0%
Table 4.8: Main reasons for the branch expansion for Awash and Oromia Cooperative
Banks in Adama city as a function of type of banks, 2020(94)
Items Options Indicators Banks Total
AB SC CBO SC
Deposit mobilization Count 3 27 30
Main reason for the branch
% within $reasons1 10.0% 90.0%
expansion
% within BDPERF 5.2% 75.0%
49
% of Total 3.2% 28.7% 31.9%

It gives loan facility Count 1 6 7
% of Total 1.1% 6.4% 7.4%

To have a large Count 4 7 11
number of branches % within $reasons1 36.4% 63.6%
% of Total 4.3% 7.4% 11.7%

To increase customer Count 32 13 45
base % within $reasons1 71.1% 28.9%
% of Total 34.0% 13.8% 47.9%

To collect foreign Count 8 7 15
currency % within $reasons1 53.3% 46.7%
% of Total 8.5% 7.4% 16.0%

Other reasons Count 10 9 19
% of Total 10.6% 9.6% 20.2%
Count 58 36 94
Total
% of Total 61.7% 38.3% 100.0%
In Table 4.7 and Table 4.8, Count presents the frequencies for all the cells for the main
reasons for the branch expansion as functions of ranked total deposits mobilized and the type
of banks respectively. Thus, 3 respondents from Awash Bank (S.C) and 27 respondents from
the Cooperative Bank of Oromia (S.C) argued “deposit mobilization” as a reason for the
branch expansion for Awash and Oromia Cooperative Banks in Adama city as a function of
type of banks, 1 respondents from Awash Bank (S.C) and 6 respondents from the
Cooperative Bank of Oromia (S.C) argued “provision of loan facilities” as a reason, 4
respondents from Awash Bank (S.C) and 7 respondents from the Cooperative Bank of
Oromia (S.C) argued “the desire to have a large number of branches which could be easily
accessed by customers” as a reason, 32 respondents from Awash Bank (S.C) and 13
respondents from the Cooperative Bank of Oromia (S.C) argued “increasing customer base”
as a reason, and 8 respondents from Awash Bank (S.C) and 7 respondents from the
Cooperative Bank of Oromia (S.C) argued “collecting foreign currency” as a reason, and 10
respondents from Awash Bank (S.C) and 9 respondents from the Cooperative Bank of
Oromia (S.C) argued “other factors” as a reason. Results for Table 4.7 can be described as
50
done for Table 4.8 in similar ways as a function of ranked total deposits mobilized rather than
the type of banks.
Row pct (% within REASONS) presents the number of respondents from Awash Bank (S.C)
and respondents from the Cooperative Bank of Oromia (S.C) who argued each of the six
reasons (in the Count column) as a percentage of the number of respondents from Awash
Bank (S.C) and respondents from the Cooperative Bank of Oromia (S.C) as well as the total
number of respondents attributed the reasons to low, medium and high rank of total deposits
mobilized by the two banks’ category for both tables (Table 4.7 and Table 4.8). The
percentage values for both tables corresponding to the respective categories are easily
observable (Table 4.7 and Table 4.8).
Col pct (% within banks and within ranked total deposits mobilized) presents the number
respondents from Awash Bank (S.C) and respondents from the Cooperative Bank of Oromia
(S.C) who argued each of the six reasons (in the Count column) as a percentage of the total
number of respondents from Awash Bank (S.C) and respondents from the Cooperative Bank
of Oromia (S.C) as well as the total number of respondents attributed the reasons to low,
medium and high rank of total deposits mobilized by the two banks for both tables,
respectively. The percentage values for both tables corresponding to the respective categories
are easily observable (Table 4.7 and Table 4.8).
Tab pct (% of Total) presents the two-way table total percentages for the number respondents
from Awash Bank (S.C) and respondents from the Cooperative Bank of Oromia (S.C) who
argued each of the six reasons (in the Count column) as a percentage of the total number of
respondents from Awash Bank (S.C) and respondents from the Cooperative Bank of Oromia
(S.C) as well as the total number of respondents attributed the reasons to low, medium and
high rank of total deposits mobilized by the two banks for both tables, respectively. The
percentage values for both tables corresponding to the respective categories are easily
observable (Table 4.7 and Table 4.8).
Out of the total participants, majority (100% in the case of Awash Bank and 94.44% in the
case of Cooperative Bank of Oromia) replied yes for the question that asked them whether
the volume of deposit mobilized by respective branches of their bank differ. Accordingly, the
volumes of deposit mobilized by respective branches of their banks’ branches differ in
comparable levels in Adama city. They attributed the reasons for the differences in volumes
of deposits mobilized by their respective bank’s branches to convenience of bank branch,
proximity to home or job, provision of good services, awareness of the society, general
51
appearance of office & materials, and every possible combination of these reasons (Table
4.6).
Exactly 60.34 percent of Awash Bank respondents and 77.78 percent of Cooperative Bank of
Oromia participants agreed that the cost of mobilizing deposits was increasing from year to
year; and among the factors stated by them for increment in the costs of mobilizing deposits
attractive interest rate, product disparity (card banking, internet banking, mobile banking,
etc.), literacy about saving, the service given by the bank, convenience of the branch, branch
expansion and increase in citizens per capita income were worth mentionable except the
variations in extent or magnitude to which these factors contributed towards the same ends.
Table 4.9: Other factors affecting deposit mobilization by branches of Awash and
Oromia Cooperative Banks in Adama city, 2020(94)
SN Items Options Responses for
AB, S.C in CBO, S.C in Both in
ni (%) ni (%) ni (%)
301 Do you think that there is stiff No 57 98.28 29 80.56 86 91.45
competition among local banks
for deposit mobilization 1 1.72 7 19.44 8 8.51
Yes
currently?
302 What are the possible reasons To give a better dividend to 0 0.00 1 2.78 1 1.06
for stiff competition? shareholders
To increase the profit 7 12.07 6 16.67 13 13.83
To increase market share 2 3.45 13 36.11 15 15.96
To make sustainable growth 41 70.69 12 33.33 53 56.38
1, 2 and 3 1 1.72 0 0.00 1 1.06
All of the above 2 3.45 0 0.00 2 2.13
2 and 3 0 0.00 1 2.78 1 1.06
2, 3 and 4 1 1.72 2 5.56 3 3.19
3 and 4 4 6.90 1 2.78 5 5.32

303 How do you see the Weak 0 0.00 8 22.22 8 8.51
competition with other private
Moderate 31 53.45 17 47.22 48 51.06
and government owned banks?
Stiff 27 46.55 11 30.56 38 40.43
304 Is government owned or Government owned banks 1 1.72 0 0.00 1 1.06
privately owned banks highly
Privately owned banks 22 37.93 20 55.56 42 44.68
compete with your bank?
35 60.34 16 44.44 51 54.26
Both Government and private
banks
307 How do you evaluate the Poor 0 0.00 2 5.56 2 2.13
understanding and commitment
Satisfactory 3 5.17 2 5.56 5 5.32
of staffs for deposit
mobilization? Good 41 70.69 14 38.89 55 58.51
Very Good 14 24.14 18 50 32 34.04

308 Recently, the bank has 4 6.90 5 13.89 9 9.57
introduced various new Satisfactory
products on deposit accounts. 27 46.55 24 66.67 51 54.26
How do you measure their Good
contribution in the effort to 27 46.55 7 19.44 34 36.17
mobilize deposit? Very Good
311 Does the volume of deposits No 0 0.00 3 8.33 3 3.19
grow because of such special
58 100 33 91.67 91 96.81
services provided for the Yes
corporate depositors?
52
312 How do you rate your Poor 0 0.00 2 5.56 2 2.13

customers’ satisfaction?
Satisfactory 8 13.79 7 19.44 15 15.96
Good 42 72.41 24 66.67 66 70.21
Very Good 8 13.79 3 8.33 11 11.70

315 Which of the following is/are Convenience of branch office 0 0.00 4 11.11 4 4.26
the major cause for the and/or location
variation in deposit among Availability of parking areas 5 8.62 1 2.78 6 6.38
branches of your bank?
Effort of the branch staffs 20 34.48 7 19.44 27 28.72
Most of the surrounding 13 22.41 1 2.78 14 14.89
society of the branch are/are
not/ identified target customers
of the bank
Others causes 7 12.07 2 5.56 9 9.57
All of the above 2 3.45 6 16.67 8 8.51
1 and 2 1 1.72 1 2.78 2 2.13
1 and 3 2 3.45 9 25 11 11.70
1 and 4 0 0.00 2 5.56 2 2.13
2 and 3 3 5.17 0 0.00 3 3.19
1, 2 and 3 1 1.72 0 0.00 1 1.06
3 and 4 0 0.00 1 2.78 1 1.06
1, 2, 3 and 4 3 5.17 2 5.56 5 5.32
2, 3, 4 and 5 1 1.72 0 0.00 1 1.06

316 How much time does it take for Less than 10 minutes 50 86.21 29 80.56 79 84.04
a customer to open a new
10 to 30 minutes 6 10.34 6 16.67 12 12.77
account in your bank?
More than 30 minutes 2 3.45 1 2.78 3 3.19
317 How much time does it take for Less than 10 minutes 57 98.28 32 88.89 89 94.68
a customer to withdraw or
10 to 30 minutes 0 0.00 3 8.33 3 3.19
deposit cash from (to) his
account? More than 30 minutes 1 1.72 1 2.78 2 2.13
318 As per the annual reports, total Societies’ preference to 2 3.45 2 5.56 4 4.26
deposit of your bank is deposit their savings than other
continuously growing during investment
the last five years. What is the Our banks have many 17 29.31 4 11.11 21 22.34
main reason? branches and larger market
share from private banks
The service given by the bank 9 15.52 2 5.56 11 11.70
The goodwill of the bank 17 29.31 1 2.78 18 19.15
Others 8 13.79 6 16.67 14 14.89
All of the above 2 3.45 6 16.67 8 8.51
1, 2, 3 and 4 0 0.00 1 2.78 1 1.06
1, 2 and 4 0 0.00 2 5.56 2 2.13
2, 3 and 4 1 1.72 3 8.33 4 4.26
2 and 3 1 1.72 2 5.56 3 3.19
3 and 4 1 1.72 4 11.11 5 5.32
1 and 4 0 0.00 1 2.78 1 1.06
2 and 4 0 0.00 2 5.56 2 2.13
319 Who do you think are major Individual customers 18 31.03 9 25 27 28.72
depositors of your bank?
Cooperative unions 2 3.45 5 13.89 7 7.45
Business organizations 6 10.34 2 5.56 8 8.51
NGOs 27 46.55 0 0.00 27 28.72
All of the above 3 5.17 0 0.00 3 3.19
Two or more combinations of the 2 3.45 20 55.56 22 23.40
above
320 Which banks pose more Commercial Bank of Ethiopia 45 77.59 3 8.33 48 51.06
53
competition to your bank? Dashen Bank 3 5.17 0 0.00 3 3.19

Cooperative Bank of Oromia 1 1.72 0 0.00 1 1.06
Awash Bank 0 0.00 2 5.56 2 2.13
1 and 9 1 1.72 1 2.78 2 2.13
1 and 3 5 8.62 0 0.00 5 5.32
1 and 8 0 0.00 1 2.78 1 1.06
1, 3, 4 and 9 0 0.00 8 22.22 8 8.51
1, 3 and 9 0 0.00 7 19.44 7 7.45
3, 4 and 9 0 0.00 4 11.11 4 4.26
3 and 8 3 5.17 0 0.00 3 3.19
1 and 9 0 0.00 2 5.56 2 2.13
1, 3, 6 and 9 0 0.00 2 5.56 2 2.13
1, 3 and 4 0 0.00 1 2.78 1 1.06
1, 4 and 9 0 0.00 3 8.33 3 3.19
4, 5 and 9 0 0.00 2 5.56 2 2.13
The respondents were asked whether they thought that there was stiff competition among
local banks for deposit mobilization currently among the branches of Awash Bank and
Cooperative Bank of Oromia, and also other types of private and governmental banks in
Adama city. According to the responses of the respondents, there were stiff competitions
among local banks for deposit mobilization currently among the branches of Awash Bank
and Cooperative Bank of Oromia, and also other types of private and governmental banks.
From this finding, it is possible to infer that the presence of stiff competitions among local
banks for deposit mobilization currently among the branches of Awash Bank and Cooperative
Bank of Oromia as well as other types of private and governmental banks were the actual
challenges they faced to mobilize deposits.
They argued by stating that the urge to give a better dividend to shareholders, to increase the
profit, to increase market share, to make sustainable growth and all or any possible
combination of these as the possible reasons for presence of stiff competitions among all
local banks operating in the particular study settings for deposit mobilization currently in
general and specifically among the branches of Awash Bank and Cooperative Bank of
Oromia in particular (Table 4.9).
These findings match with previously reported findings of Samuel Tesfahunegn (2015)
conducted an empirical study that intends to identify the challenges in deposit mobilization
for private banks in Ethiopia by concentrating the case on Awash Bank (S.C) using
descriptive method particularly survey design approach for his study. His findings of the
study show that AB, S. C and other private banks are operating in a dynamic and highly
54
competitive environment and there is high possibility of catch-up and by-pass among these
banks. Also, private commercial banks should prepare for the inevitable stiff competition that
will arise from local and with the eminent future entrant of foreign banks.
They were also asked the question on how did they see the competition with other private and
government owned banks in Adama city; and their replies revealed that it was moderate and
stiff (53.45% and 46.55%) for respondents from Awash Bank while it was moderate and stiff
(47.22% and 30.56%) for respondents from the Cooperative Bank of Oromia’s (S.C)
respondents accordingly. Moreover, their responses for the question that asked them whether
it was the government owned or privately owned banks highly competed with their
corresponding bank’s branches in the specific study settings as privately owned banks
(37.93%) and both government and privately owned banks (60.34%) based on respondents
from Awash Bank and as privately owned banks (55.56%) and both government and
privately owned banks (44.44%) based on respondents from Cooperative Bank of Oromia
respectively. From these findings, it could be reasonable to argue that the presence of
competitions ranging from moderate-to-stiff are their actual challenges which they have
encountered in their efforts to mobilize adequate deposits by the branches of both banks in
Adama city.
The above findings are consistent to some extent with the findings of the Mshauri (2012)
which indicated that internet banking facilities, banks technology, location of the bank,
varieties of the service rendered, interest rate, ATM charges, employee’s competence, quality
of the service rendered, and marketing strategies of the bank are important factors and have
been applied into the banks to mobilize deposit as well as the location of the banks, level of
bank charges, and quality of services rendered and market strategies of the banks found to be
most important factors influence deposit mobilization, while level of bank charges, location
of the bank/branch, and market strategies of the bank found to be most applied factors to the
banks so as to influence deposit mobilization. Moreover, the findings of the study show that
AIB and other private banks are operating in a dynamic and highly competitive environment
and there is high possibility of catch-up and by-pass among these banks; also, private
commercial banks should prepare for the inevitable stiff competition that will arise from local
and with the eminent future entrant of foreign banks to withstand effects of competition and
to adequately mobilize deposits and by doing so, they can solve the paradox of the liquidity
problem and the unbanked resources (Samuel Tesfahunegn, 2015).
55
45.00%
39.36%39.36%
40.00%
AB SC CBO SC
35.00%
Total
30.00%
25.00%
22.34%
21.28%
20.00% 19.15%
15.00% 19.15% 12.77%
10.00% 12.77%
5.32%
5.00% 4.26%
1.06%
1.06% 1.06% 1.06%
0.00% 0.00% 0.00% 0.00%
0.00%
Game deposit Youth deposit Sinqqee deposit Cooppay deposit Other types All of the above
Figure 4.5: Types of new deposit products offered by the banks in Adama city, 2020(94)
From the above Figure (Figure 4.5), there are differences between the branches of the two
banks in terms of new and special deposit products they rendered to their corresponding
customers in Adama city. According to the responses of respondents from Cooperative Bank
of Oromia (S.C), branches of it in Adama city offered Cooppay deposit type to its customers
(19.15%); other types of new deposit accounts by Awash Bank (S.C) (39.36%); Sinqqee or
women’s special deposit accounts was rendered by Awash Bank (S.C) (21.28%) but only
1.06 percent from the Cooperative Bank of Oromia (S.C) selected it; and the Cooperative
Bank of Oromia (S.C) offered game deposit account (1.06%) and youth deposit account
(4.26%) while Awash Bank (S.C) didn’t render game deposit account (0.00%) and rendered
youth deposit account (1.06%) correspondingly (Figure 4.4).
Again, the participants were asked that “How do you evaluate the understanding and
commitment of staffs for deposit mobilization?” and their responses revealed that they
evaluated as poor (0.00%, 5.56%), satisfactory (5.17%, 5.56%), good (70.69%, 38.89%) and
very good (24.14%, 50%) correspondingly for respondents from Awash Bank and
Cooperative Bank of Oromia. Still, they were asked that “Recently, the bank has introduced
various new products on deposit accounts. How did you measure their contribution in the
56
effort to mobilize deposit by branches of your bank?” and their replies showed that they
measured as satisfactory (6.90%, 13.89%), good (46.55%, 66.67%) and very good (46.55%,
19.44%) correspondingly for respondents from Awash Bank and Cooperative Bank of
Oromia. Moreover, which of the following was/were the major cause for the variation in
deposit mobilization among branches of your bank was another question posed to the
participants; and they mentioned that the convenience of branch office and/or location
(0.00%, 11.11%), availability of parking areas (8.62%, 2.78%), effort of the branch staffs
(34.48%, 19.44%), most of the surrounding society of the branch are not identified target
customers of the bank (22.41%, 2.78%), and in varying extents for all or any possible kind of
combination of these factors correspondingly for respondents from Awash Bank and
Cooperative Bank of Oromia (Table 4.9). Furthermore, which banks posed more competition
to your bank was presented for them to identify banks that posed strong competition to their
banks’ branches with regard to mobilizing deposits. The answers of the respondents
demonstrated that Commercial Bank of Ethiopia (77.59%, 8.33%), Dashen Bank (5.17%,
0.00%), Cooperative Bank of Oromia (1.72%, 0.00%), Awash Bank (0.00%, 5.56%), and in
varying extents for all or any possible kind of combination of these factors correspondingly
for respondents from Awash Bank and Cooperative Bank of Oromia were the major banks
that competed with their banks’ branches in mobilizing deposits in decreasing order of
significance (Table 4.9).
From the foregoing descriptions of the findings of the study, it is possible to infer that there
are significant variations across the branches of the two banks in Adama city in relations to
how the respondents evaluated the understanding and commitment of staffs for deposit
mobilization, how they measured their contribution in the effort to mobilize deposit by
branches of their banks, the major causes for the variation in deposit mobilization among
branches of their respective banks and regarding banks that posed stiff competition to their
efforts of mobilizing deposits. There was no any previously reported empirical finding to
compare and contrast these findings with.
Table 4.10: Main factors and challenges affecting deposit volumes mobilized by Awash
and Oromia Cooperative Banks in Adama city as a function of type of banks, 2020(94)
$factors3*BANK Crosstabulation
Bank name Total
AB SC CBO SC
Main factors Count 12 10 22
affecting deposit Saving interest rate % within $factors3 54.5% 45.5%
volumes mobilized % within BANK 21.1% 28.6%
57
by the two banks in % of Total 13.0% 10.9% 23.9%

Adama citya Count 6 23 29
Economic % within $factors3 20.7% 79.3%
development of the
% within BANK 10.5% 65.7%
country
% of Total 6.5% 25.0% 31.5%
Count 9 4 13
The money supplied % within $factors3 69.2% 30.8%
by government (by
printing money)
% of Total 9.8% 4.3% 14.1%
Count 6 10 16
The number of % within $factors3 37.5% 62.5%
branches opened % within BANK 10.5% 28.6%
% of Total 6.5% 10.9% 17.4%
Count 25 4 29
Inflation increase in % within $factors3 86.2% 13.8%
per capita income % within BANK 43.9% 11.4%
% of Total 27.2% 4.3% 31.5%
Count 5 15 20
Quality customer % within $factors3 25.0% 75.0%
service % within BANK 8.8% 42.9%
% of Total 5.4% 16.3% 21.7%
Count 8 5 13
% within $factors3 61.5% 38.5%
Others
% of Total 8.7% 5.4% 14.1%
Count 57 35 92
Total
% of Total 62.0% 38.0% 100.0%
Percentages and totals are based on respondents.
a. Group
$challenges*BANK Crosstabulation
Bank name Total
AB SC CBO SC
Count 25 23 48
Competition from % within $challenges 52.1% 47.9%
other banks % within BANK 43.1% 63.9%
% of Total 26.6% 24.5% 51.1%
Count 15 10 25
More banks joined % within $challenges 60.0% 40.0%
the market % within BANK 25.9% 27.8%
Major challenges % of Total 16.0% 10.6% 26.6%
affecting deposit
Count 2 17 19
mobilizationa
% within $challenges 10.5% 89.5%
Lack of technology
% of Total 2.1% 18.1% 20.2%
Count 4 6 10
Lack of trained % within $challenges 40.0% 60.0%
manpower % within BANK 6.9% 16.7%
% of Total 4.3% 6.4% 10.6%
58
Count 24 7 31
Small number of % within $challenges 77.4% 22.6%
branches
(inaccessibility)
% of Total 25.5% 7.4% 33.0%
Count 2 9 11
Government % within $challenges 18.2% 81.8%
laws/regulations % within BANK 3.4% 25.0%
% of Total 2.1% 9.6% 11.7%
Count 5 5 10
Government % within $challenges 50.0% 50.0%
participation in
banking industry
% of Total 5.3% 5.3% 10.6%
Count 23 19 42
Political instability
% of Total 24.5% 20.2% 44.7%
Count 32 20 52
Shocks and riots
% of Total 34.0% 21.3% 55.3%
Count 40 22 62
Inter-ethnic conflicts
% of Total 42.6% 23.4% 66.0%
Count 58 36 94
Total
% of Total 61.7% 38.3% 100.0%
Percentages and totals are based on respondents.
a. Group
In Table 4.10, Count presents the frequencies for all the cells for the main factors and
challenges affecting the volumes of deposits mobilized by the branches of the two banks
operating in Adama city as function of banks. The respondents from the two banks mentioned
that saving interest rate, economic development of the country, the money supplied by
government (by printing money), the number of branches opened, inflation increase in per
capita income, quality customer service and others as the main factors which affected the
volumes of deposits mobilized by the branches of the two banks in Adama city. Counts and
percentage values within main factors for Awash Bank (S.C) and Cooperative Bank of
Oromia (S.C) were 12(54.5%) and 10(45.5%) while percentage values within the bank were
21.1% and 28.6% concerning the negative effects of saving interest rate accordingly; counts
and percentage values within main factors for Awash Bank (S.C) and Cooperative Bank of
10.5% and 65.7% concerning the negative effects of economic development of the country
59
correspondingly; counts and percentage values within main factors for Awash Bank (S.C)
and Cooperative Bank of Oromia (S.C) were 9(69.2%) and 4(30.8%) while percentage values
within the bank were 15.8% and 11.4% concerning the negative effects of the money
supplied by government (by printing money) respectively; counts and percentage values
within main factors for Awash Bank (S.C) and Cooperative Bank of Oromia (S.C) were
6(37.5%) and 10(62.5%) while percentage values within the bank were 10.5% and 28.6%
concerning the negative effects of the number of branches opened consecutively; counts and
percentage values within main factors for Awash Bank (S.C) and Cooperative Bank of
43.9% and 11.4% concerning the negative effects of inflation increase in per capita income
successively; counts and percentage values within main factors for Awash Bank (S.C) and
Cooperative Bank of Oromia (S.C) were 5(25.0%) and 15(75.0%) while percentage values
within the bank were 8.8% and 42.9% concerning the negative effects of quality customer
service correspondingly; and counts and percentage values within main factors for Awash
Bank (S.C) and Cooperative Bank of Oromia (S.C) were 8(61.5%) and 5(38.5%) while
percentage values within the bank were 14.0% and 14.3% concerning the negative effects of
other factors respectively (Table 4.10). These imply that there were differences in the extents
of these factors affecting the volumes of mobilized deposits between the two banks.
In addition to these factors, the participated respondents stated competition from other banks,
more banks joined the market and banking industry, lack of technology, lack of trained
manpower, possessing small number of branches (inaccessibility), government laws and/or
regulations, government participation in banking industry, political instability, shocks and
riots and inter-ethnic conflicts as the major challenges that adversely affected the volumes of
deposits mobilized per each types of deposit accounts, their sums and the ranks of the banks
based on the deposits mobilization over the last three years panel. Counts and percentage
values within challenges for Awash Bank (S.C) and Cooperative Bank of Oromia (S.C) were
concerning the negative effects of competition from other banks correspondingly; counts and
percentage values within challenges for Awash Bank (S.C) and Cooperative Bank of Oromia
(S.C) were 15(60%) and 10(40.0%) while percentage values within the bank were 25.9% and
27.8% concerning the negative effects of joining of more banks into the market and the
banking industry accordingly; counts and percentage values within challenges for Awash
Bank (S.C) and Cooperative Bank of Oromia (S.C) were 2(10.5%) and 17(89.5%) while
60
lack of appropriate technology consecutively; counts and percentage values within challenges
for Awash Bank (S.C) and Cooperative Bank of Oromia (S.C) were 4(40%) and 6(60%)
while percentage values within the bank were 6.9% and 16.7% concerning the negative
effects of lack of trained manpower successively; counts and percentage values within
challenges for Awash Bank (S.C) and Cooperative Bank of Oromia (S.C) were 24(77.4%)
and 7(22.6%) while percentage values within the bank were 41.4% and 19.4% concerning the
negative effects of having possessed small number of branches (inaccessibility of branches
and banks) respectively; counts and percentage values within challenges for Awash Bank
(S.C) and Cooperative Bank of Oromia (S.C) were 2(18.2%) and 9(81.8%) while percentage
values within the bank were 3.4% and 25.0% concerning the negative effects of government
laws/regulations correspondingly; counts and percentage values within challenges for Awash
Bank (S.C) and Cooperative Bank of Oromia (S.C) were 5(50%) and 5(50%) while
government participation in banking industry consecutively; counts and percentage values
within challenges for Awash Bank (S.C) and Cooperative Bank of Oromia (S.C) were
concerning the negative effects of political instability accordingly; counts and percentage
values within challenges for Awash Bank (S.C) and Cooperative Bank of Oromia (S.C) were
concerning the negative effects of shocks and riots (or social unrest) respectively; and counts
and percentage values within challenges for Awash Bank (S.C) and Cooperative Bank of
69.0% and 61.1% concerning the negative effects of inter-ethnic conflicts correspondingly.
Thus, Awash Bank (S.C) was affected more severely by challenges such as the joining of
more banks into the market and the banking industry, having possessed small number of
branches (inaccessibility of branches and banks), political instability, shocks and riots (or
social unrest) and inter-ethnic conflicts than the Cooperative Bank of Oromia (S.C) while the
later one was affected more severely by challenges like government laws/regulations, lack of
trained manpower and lack of appropriate technology than the former one (Table 4.10).
Therefore, it is possible to deduce that there were differences in the extents of negative
impacts of these challenges exerted on mobilized deposits between the two banks addressed
in the study.
From these findings, it is possible to conclude that saving interest rate, economic
development of the country, the money supplied by government (by printing money), the
61
number of branches opened, inflation increase in per capita income, quality customer service,
competition from other banks, the joining of more banks into the market and banking
industry, lack of technology, lack of trained manpower, possessing small number of branches
(inaccessibility), government laws and/or regulations, government participation in banking
industry, political instability, shocks and riots and inter-ethnic conflicts as the challenges that
deterred and negatively influenced volumes and ranked total deposits mobilized by the
branches of the two banks even though the magnitudes of influences of the challenges
differed across their branches in Adama city. Moreover, it could be inferred that the extent of
adverse effects of these factors and challenges on the volumes and ranked total deposits
mobilized by the branches of the two banks are inconsistent and not the same. Hence, the
negative impacts of the main factors and challenges on the volumes and ranked total deposits
mobilized by the branches of the two banks are different.
These findings are in agreement with previously reported findings from various countries and
different banking industries worldwide. For instance, Desinga (1975) argued that deposit
mobilization is very difficult task and depends up on various factors that are internal and
external to the banking system. External factors are the general economic environment of the
region, the volume of business transaction of the region, the confidence of the people on the
banking system, the banking habit of the people and the saving potential of the region. Even
when external factors are more conducive for deposit mobilization, banks may fail because of
unfavorable internal factors such as location, type of building and window dressing
(furniture, cheque books, vouchers, pay slips etc.), which assure the customers about the
physical fitness of a bank (Desinga, 1975). Aggregate shocks affect deposits and interest rates
during crises, regardless of bank fundamentals and investors’ responsiveness to bank risk
taking increases in the aftermath crises (Maria and Sergio, 2001). Therefore, given all other
variables the shocks happened in the economy can affect the banks’ deposits. With respect to
the effect of inflation on savings, it can be mentioned that in general, all individuals who save
a part of their incomes in banks are directly damaged by the inflation and their assets
decrease in proportion with money value decrease (Mohammad and Mahdi, 2010). In that
case as Mohammad and Mahdi (2010) describes people try to change their cashes and savings
to more reliable and stable forms such as land, jewelry, antiques, art collections, foreign
currencies that causes to definite decrease in commercial bank’s total deposit. High inflation
rates reduce the real value of deposits (Baqui et al, 1987). According to Baqui et al (1987),
inflation technically did not decrease deposit; however, it decreases the value of deposits.
One of the most effective factors for deciding to deposit in banking system is the interest rate
62
(Mohammad and Mahdi, 2010). Herald and Heiko (2009) also mentioned interest as one of
the determining factor for commercial banks deposits. Philip (1968), also states that the
offering of attractive interest rate on bank deposits may be considered to have had a
beneficial effect. Moreover, Mustafa and Sayera (2009) said that low deposit rates are
discouraging saving mobilization. Bhatt (1970) said that the banking system is unlikely to be
in a position to meet the demand for bank credit unless concerted policy is pursued to raise
the rate of saving generally and the rate of saving in the form of deposits in particular.
Account opening processes, loan application processes, non- functioning of ICT facilities
inadequate branches and poor customer service delivery are identified as some of the
challenges facing ADB in their deposit mobilization operations. The study recommends the
following as some of the possible means of addressing the above challenges. Regular training
of staff, reduce loan application requirement, improves ICT facilities, provision of attractive
products such as mobile phone services, open new branches at vantage locations and ensure
good customer services (Joyce, 2015).
Another study also revealed that banks concentration in the cities and a few urban areas as
well as their product design and services are targeted to the literate formal sector employees;
and unfavorable macroeconomic conditions have resulted in negative real interest rate on
deposits while unnecessary government intervention has reduced the confidence in the
banking sector in Ghana (Sylvester Opoku, 2011).
The country’s economic, social and political factors can affect commercial banks; and this
assertion according to Herald and Heiko (2009), country specific risks such as political,
economic and financial risks may affect the propensity for depositors to place funds in the
banking system. Any single bank operates under the rule and regulation of the country where
it belongs, also different problems and shocks that has happened in the country has its own
concern in the banks operation. Generally, banks’ success in their operation is mainly
depends on the environment where the business is undertaken. The researcher has identified
ten country specific factors that have effect on the commercial banks deposits from the
literature. These are saving interest rate or deposit rate, inflation, real interest rate, number of
commercial banks available in the country, population growth, per capita income of the
society, economic growth, consumer price index, gross domestic product (GDP) and shocks.
63
4.4.2. Service Quality and Its Effects

Table 4.11: Influences of service quality and its effects on deposit mobilization of Awash
SN Items Banks Responses
Challenges Neither Opportuniti
I Section one: Service Quality
ni (%) ni (%) es ni (%)
324 Among the dimensions of service quality i.e. AB, S.C 16 (27.59) 7 (12.07) 35 (60.34)
reliability, responsiveness, assurance, empathy,
and tangibles, the short fall on Responsiveness CBO, S.C 3 (8.33) 9 (25) 24 (66.67)
has significant negative impact on the resource or
deposit mobilization. Both 19 (20.21) 16 (17.02) 59 (62.77)
325 I believe if our bank uses all the service quality AB, S.C 0 (0.00) 3 (5.17) 55 (94.83)
dimensions, it can increases customer attraction CBO, S.C 1 (2.78) 4 (11.11) 31 (86.11)
and deposit mobilization.
Both 1 (1.06) 7 (7.45) 86 (91.49)
326 The amount of deposits mobilized as a result of AB, S.C 2 (3.45) 0 (0.00) 56 (96.55)
application of service quality meets the bank’s CBO, S.C 2 (5.56) 10 (27.78) 24 (66.67)
target.
Both 4 (4.26) 10 (10.64) 80 (85.11)
327 Our bank do not facilitate & train to all AB, S.C 34 (58.62) 2 (3.45) 22 (37.33)
concerned employees about the advantage of CBO, S.C 17 (47.22) 8 (22.22) 11 (30.56)
service quality and closely follows its
Both 51 (54.26) 10 (10.64) 33 (35.11)
implementation.
328 In general, application of service quality AB, S.C 0 (0.00) 0 (0.00) 58 (100)
increases deposit mobilization performance of the CBO, S.C 2 (2.78) 5 (13.89) 29 (80.56)
bank.
Both 2 (2.13) 5 (5.32) 87 (92.55)
Weighted Service Quality AB, S.C 0 (0.00) 16 (27.59) 42 (72.41)
CBO, S.C 1 (2.78) 8 (13.89) 27 (75)
Both 1 (1.06) 24 (25.53) 69 (73.40)
Analyses of the responses of the participants for the first item revealed that 16(27.59%) of the
respondents from Awash Bank (S.C) and 3(8.33%) from Cooperative Bank of Oromia (S.C)
agreed that reliability, responsiveness, assurance, empathy, and tangibles, the short fall on
Responsiveness has significant negative impact on the resource or deposit mobilization and
hence reinforced deposits mobilization efforts of the respective banks and considered it as the
opportunity of mobilizing deposits as the item was stated negatively while 35 (60.34%) of the
respondents from Awash Bank (S.C) and 24 (66.67%) from Cooperative Bank of Oromia
(S.C) agreed that it deterred deposits mobilization efforts of the respective banks and
considered it as the challenge of mobilizing deposits. Analyses of the responses of the
participants for the second item revealed that 0 (0.00%) of the respondents from Awash Bank
(S.C) and 1 (2.78%) from Cooperative Bank of Oromia (S.C) agreed that banks usage of all
the service quality dimensions can increases customer attraction and deposit mobilization
served as challenges while 55 (94.83%) of the respondents from Awash Bank (S.C) and 31
(86.11%) from Cooperative Bank of Oromia (S.C) agreed that it facilitated deposits
64
mobilization efforts of the respective banks and considered it as the opportunity of mobilizing
deposits. Responses of the respondents for the rest of items presented in Table 4.11 could be
described in similar ways by taking whether the items were constructed negatively or
affirmatively into considerations (Table 4.11). In aggregate, respondents of the Cooperative
Bank of Oromia (S.C) (75%) and that of Awash Bank (S.C) (72.41%) perceived application
of service quality increases deposit mobilization performance of the bank and hence
provision of quality services was an opportunity to mobilize deposits for both banks except
the presence of marginal differences between the respondents of the two respective banks.
From these findings, it is possible to infer that the usage of service quality was a significant
factor that either negatively or positively affects the banks efforts of mobilizing deposits.
Similarly, results of Fekadu Yosef done to investigate factors affecting deposit mobilization:
The case of Dashen Bank S.C for Addis Ababa branches reveal that independent variables
such as service quality is positively and statistically significant impact on the bank deposit
growth and hence he conclude these independent variables are the opportunities of Dashen
Bank to mobilize deposits (Fekadu, 2019).
4.4.3. Branch Expansion and Its Effects
Table 4.12: Influences of branch expansion and its effects on deposit mobilization of
Awash and Oromia Cooperative Banks in Adama city, 2020(94)
Challenges Neither Opportuniti
III Section Three: Branch Expansion
ni (%) ni (%) es ni (%)
334 Our bank recently works hard on branch AB, S.C 0 (0.00) 3 (5.17) 55 (94.83)
expansion and it has contributed significantly CBO, S.C 1 (2.78) 7 (19.44) 28 (77.78)
towards deposits mobilization. Both 1 (1.06) 10 (10.64) 83 (88.30)
335 Although branch expansion has good AB, S.C 0 (0.00) 3 (5.17) 55 (94.83)
contribution to deposit mobilization, the practice CBO, S.C 2 (5.56) 8 (22.22) 26 (72.22)
of new branches somewhat erode customer base
Both 2 (2.13) 11 (11.70) 81 (86.17)
as well as deposit mobilization performance.
336 Branch expansion support existing branches AB, S.C 0 (0.00) 2 (3.45) 56 (96.55)
resource mobilization effort through facilitating
high branch network that enable customers’ CBO, S.C 1 (2.78) 8 (22.22) 27 (75)
access their account from elsewhere using the
core banking technology. Both 1 (1.06) 10 (10.64) 83 (88.30)
337 Branch opening at rural areas benefit the bank in AB, S.C 1 (1.72) 5 (8.62) 52 (89.66)
terms of increasing market share as well as CBO, S.C 1 (2.78) 4 (11.11) 31 (86.11)
deposit mobilization. Both 2 (2.13) 9 (9.57) 83 (88.30)
338 In general, branch expansions greatly contribute AB, S.C 1 (1.72) 2 (3.45) 55 (94.83)
the deposit mobilization performance of our CBO, S.C 2 (5.56) 2 (5.55) 32 (88.89)
bank.
Both 3 (3.19) 4 (4.26) 87 (92.55)
Weighted Branch Expansion AB, S.C 0 (0.00) 2 (3.45) 56 (96.55)
CBO, S.C 1 (2.78) 2 (5.56) 33 (91.67)
Both 1 (1.06) 4 (4.26) 89 (94.68)
65
Analyses of the responses of the participants for the first item revealed that 0 (0.00%) of the
respondents from Awash Bank (S.C) and 1 (2.78%) from Cooperative Bank of Oromia (S.C)
agreed that working hard on branch expansion had contributed significantly towards deposits
mobilization and hence deterred deposits mobilization efforts of the respective banks and
considered it as the challenge of mobilizing deposits as the item was stated affirmatively
while 55 (94.83%) of the respondents from Awash Bank (S.C) and 28 (77.78%) from
Cooperative Bank of Oromia (S.C) agreed that it encouraged deposits mobilization efforts of
the respective banks and considered it as an opportunity of mobilizing deposits. Analyses of
the responses of the participants for the second item revealed that 0 (0.00%) of the
respondents from Awash Bank (S.C) and 2 (5.56%) from Cooperative Bank of Oromia (S.C)
agreed that although branch expansion had good contribution to deposit mobilization, the
practice of new branches somewhat eroded customer base as well as deposit mobilization
performance and hence became an opportunity for deposit mobilization as the sense of the
item was negative while 55 (94.83%) of the respondents from Awash Bank (S.C) and 26
(72.22%) from Cooperative Bank of Oromia (S.C) agreed that it demotivated deposits
mobilization efforts of the respective banks and considered it as the challenge of mobilizing
affirmatively into considerations (Table 4.12). In aggregate, the respondents of the
Cooperative Bank of Oromia (S.C) (91.67%) and that of Awash Bank (S.C) (96.55%) agreed
that branch expansion that took population growth and customers into considerations to
greatly contribute towards the banks efforts of mobilizing deposits and hence branch
expansion that took population growth and customers into considerations was an opportunity
to mobilize adequate deposits for both banks except the presence of marginal differences
between the respondents of the two respective banks.
From these findings, it is possible to infer that branch expansion was a significant factor that
either negatively or positively affects the banks efforts of mobilizing deposits. Similarly,
results of Fekadu Yosef done to investigate factors affecting deposit mobilization: The case
of Dashen Bank S.C for Addis Ababa branches reveal that independent variables such as
service quality, branch expansion, interest rate, technology, disposable income and market
strategy are positively and statistically significant impact on the bank deposit growth and
hence he conclude these independent variables are the opportunities of Dashen Bank to
mobilize deposits (Fekadu, 2019).
66
This finding of the present study is consistent with the finding of Eyob Teka (2019)
undertaken to investigate the impact of branch expansion on deposit mobilization, loan
disbursement and profitability in the case of Lion International Bank (S.C.). His findings
indicate that among the four independent variables, government policy is the first most
significant factor that is perceived to be important in deposit mobilization, loan disbursement
and profitability of Lion International Bank S.C. followed by site of branch; population
growth takes the third place and branch office rent is regarded as the fourth most important
factor of deposit mobilization, loan disbursement and profitability; government policy,
population growth and site of branch office are positively related with all the dependent
variables(deposit mobilization, loan disbursement and profitability) while branch office rent
is negatively related with loan disbursement and profitability; and the relationship between
these financial performance factors and branch network was significant which is meant that
the banks’ growth in deposit, loan and profit highly relates to branch network.
4.4.4. Interest Rates and Its Effects
Table 4.13: Influences of interest rates and its effects on deposit mobilization of Awash
Challenges Neither Opportunities
IV Section Four: Interest Rate
ni (%) ni (%) ni (%)
339 Provision of high interest rate on deposit might AB, S.C 1 (1.72) 9 (15.52) 48 (82.76)
attract more deposits but not advisable as it CBO, S.C 5 (13.89) 6 (16.67) 25 (69.44)
affect banks profitability.
Both 6 (6.38) 15 (15.96) 73 (77.66)
340 In order to attract high deposits from customers AB, S.C 1 (1.72) 14 (24.14) 43 (74.14)
the interest rate provided by our bank should CBO, S.C 3 (8.33) 9 (25) 24 (66.67)
be comparable to inflation rate of the country.
Both 4 (4.26) 23 (24.47) 67 (71.28)
341 Without provision of attractive deposits AB, S.C 10 (11.24) 20 (34.48) 28 (48.28)
interest rate, only good customer service CBO, S.C 4 (11.11) 10 (27.78) 22 (61.11)
attracts more customers & deposits.
Both 14 (14.89) 33 (35.11) 50 (53.19)
342 Our bank has no alternative as well as AB, S.C 23 (39.66) 9 (15.52) 26 (44.83)
attractive deposits interest rates when CBO, S.C 13 (36.11) 10 (27.78) 13 (36.11)
compared with all commercial banks in
Both 36 (38.30) 19 (20.21) 39 (41.49)
Ethiopia.
343 Our bank can mobilize high deposit if it AB, S.C 5 (8.62) 14 (24.14) 39 (67.24)
provides attractive interest rate. CBO, S.C 6 (16.67) 14 (38.89) 16 (44.44)
Both 11 (11.70) 28 (29.79) 55 (58.51)
344 In general interest rate on deposits plays AB, S.C 1 (1.72) 11 (18.37) 46 (79.31)
significant role in encouraging savings of CBO, S.C 4 (11.11) 13 (36.11) 19 (52.78)
disposable income in general and that of none
Both 5 (5.32) 24 (25.53) 65 (69.15)
affluent people income in particular.
Weighted Interest Rate AB, S.C 0 (0.00) 16 (27.59) 42 (72.41)
CBO, S.C 2 (5.56) 12 (33.33) 22 (61.11)
Both 2 (2.13) 28 (29.79) 64 (68.09)
67
Analyses of the responses of the participants for the first item revealed that 48 (82.76%) of
the respondents from Awash Bank (S.C) and 25 (69.44%) from Cooperative Bank of Oromia
(S.C) agreed that the provision of high interest rate on deposit might attract more deposits but
not advisable as it affect banks profitability and hence discouraged deposits mobilization
efforts of the respective banks and considered it as the challenge of mobilizing deposits as the
item was stated negatively while 1 (1.72%) of the respondents from Awash Bank (S.C) and 5
(13.89%) from Cooperative Bank of Oromia (S.C) agreed that it contributed positively
towards deposits mobilization efforts of the respective banks and considered it as the
opportunity of mobilizing deposits. Analyses of the responses of the participants for the
second item revealed that 1 (1.72%) of the respondents from Awash Bank (S.C) and 3
(8.33%) from Cooperative Bank of Oromia (S.C) agreed that in order to attract high deposits
from customers the interest rate provided by our bank should be comparable to inflation rate
of the country and hence it served as challenges while 43 (74.14%) of the respondents from
Awash Bank (S.C) and 24 (66.67%) from Cooperative Bank of Oromia (S.C) agreed that it
facilitated deposits mobilization efforts of the respective banks and considered it as the
opportunity of mobilizing deposits. Responses of the respondents for the rest of items
presented in Table 4.13 could be described in similar ways by taking whether the items were
constructed negatively or affirmatively into considerations (Table 4.13). In aggregate,
respondents of the Cooperative Bank of Oromia (S.C) (22 (61.11%)) and that of Awash Bank
(S.C) (42 (72.41%)) perceived provision of reasonable interest rates positively contributes
towards deposit mobilization performance of the bank and hence provision of reasonable
interest rates was an opportunity to mobilize deposits for both banks but with greater
emphasis in the case of the Awash Bank (S.C).
From these findings, it is possible to infer that the interest rates paid on mobilized deposits
was a significant factor that either negatively or positively affects the banks efforts of
mobilizing deposits. Similarly, results of Fekadu Yosef done to investigate factors affecting
deposit mobilization: The case of Dashen Bank S.C for Addis Ababa branches reveal that
independent variables such as service quality, branch expansion, interest rate, technology,
the bank deposit growth and hence he conclude these independent variables are the
opportunities of Dashen Bank to mobilize deposits (Fekadu, 2019).
68
4.4.5. Technological Usage and Its Impacts

Table 4.14: Influences of technological usage and its impacts on deposit mobilization of
Awash and Oromia Cooperative Banks in Adama city, 2020(94)
Challenges Neither Opportunitie
V Section Five: Technological Impact
ni (%) ni (%) s ni (%)
345 AMOLE (Mobile and internet banking) is more AB, S.C 1 (1.72) 28 (48.28) 29 (50)
convenient to customers bill payments,
purchase of commodities from supermarket,
online book purchase, online music purchase, CBO, S.C 4 (11.11) 10 (27.78) 22 (61.11)
money transfer service like account to account,
account to wallet, wallet to account, and wallet
to wallet) also useful for air time purchase etc. Both 5 (5.32) 38 (40.43) 51 (54.26)
This technology contributes to the banks
customer attraction and deposit mobilization
performance.
346 Among the different technologies our bank is AB, S.C 1 (1.72) 9 (15.52) 48 (82.76)
using, excellent core banking system which
enable the banks customers use their account CBO, S.C 5 (13.89) 7 (19.44) 24 (66.67)
either from any branch of Adama city or
outside Adama city supports to attract more Both 6 (6.38) 16 (17.02) 72 (76.60)
customer and high deposits.
347 Although our bank introduced latest Omni- AB, S.C 29 (50) 1 (1.72) 28 (48.28)
channel (AMOLE) technology which could
attract new customer and retain the existing CBO, S.C 5 (13.89) 11 (30.56) 20 (55.56)
ones, the bank couldn’t make use of its
technology advantage due to inappropriate
advertisement and weak initiation of most of Both 34 (36.17) 12 (12.77) 48 (51.06)
its staff.
348 Our bank is pioneer in introducing ATM and AB, S.C 3 (5.17) 7 (12.07) 48 (82.76)
POS machines. It took the first mover CBO, S.C 8 (22.22) 16 (44.44) 12 (33.33)
advantage in attracting more customers from
the market also in mobilizing good size of hard Both 11 (11.70) 23 (24.47) 60 (63.83)
currency than other commercial banks.
349 Our bank didn’t get benefit of deposit AB, S.C 22 (37.93) 14 (24.14) 22 (37.93)
mobilization from cross selling and up selling CBO, S.C 12 (33.33) 6 (16.67) 18 (50)
of transactions by using its technology.
Both 34 (36.17) 20 (21.28) 40 (42.55)
350 In general, application of appropriate AB, S.C 0 (0.00) 3 (5.17) 55 (94.83)
technology contributes high to increase market
share in resource mobilization and for CBO, S.C 6 (16.67) 9 (25) 21 (58.33)
attraction of potential customers. Both 6 (6.38) 12 (12.77) 76 (80.85)
Weighted Technological Impact AB, S.C 0 (0.00) 22 (37.93) 36 (62.07)
CBO, S.C 1 (2.78) 18 (50) 17 (47.22)
Both 1 (1.06) 40 (42.55) 53 (56.38)
Analyses of the responses of the participants for the first item revealed that 29 (50%) of the
(S.C) agreed that AMOLE (Mobile and internet banking) is more convenient to customers
bill payments, purchase of commodities from supermarket, online book purchase, online
music purchase, money transfer service like account to account, account to wallet, wallet to
69
account, and wallet to wallet) also useful for air time purchase etc. This technology
contributes to the banks customer attraction and deposit mobilization performance and hence
reinforced deposits mobilization efforts of the respective banks and considered it as the
opportunity of mobilizing deposits as the item was stated negatively while 1 (1.72%) of the
(S.C) agreed that it deterred deposits mobilization efforts of the respective banks and
considered it as the challenge of mobilizing deposits. Analyses of the responses of the
participants for the second item revealed that 1 (1.72%) of the respondents from Awash Bank
(S.C) and 5 (13.89%) from Cooperative Bank of Oromia (S.C) agreed that excellent core
banking system which enable the banks customers use their account either from any branch
of Adama city or outside Adama city supports to attract more customer and high deposits
served as challenges while 48 (82.76%) of the respondents from Awash Bank (S.C) and 24
(66.67%) from Cooperative Bank of Oromia (S.C) agreed that it facilitated deposits
mobilization efforts of the respective banks and considered it as the opportunity of mobilizing
Bank of Oromia (S.C) (17 (47.22%)) and that of Awash Bank (S.C) (36 (62.07%)) perceived
usage of proper and relevant modern technologies can facilitate and strengthen deposit
mobilization performance of the bank and hence usage of proper and relevant modern
technologies was an opportunity to mobilize deposits for both banks but with greater
emphasis in the case of the Awash Bank (S.C).
From these findings, it is possible to infer that the usage of modern technology was a
significant factor that either negatively or positively affects the banks efforts of mobilizing
deposits. Similarly, results of Fekadu Yosef done to investigate factors affecting deposit
mobilization: The case of Dashen Bank S.C for Addis Ababa branches reveal that
70
4.4.6. Disposable Income or Economic Growth

Table 4.15: Influences of disposable income or economic growth on deposit mobilization
Section Six: Disposable Income (Economic Challenges Neither Opportunitie
VI
Growth ni (%) ni (%) s ni (%)
351 Economic growth contributes to increase AB, S.C 10 (17.24) 8 (13.79) 40 (68.37)
disposable income and which leads to the CBO, S.C 5 (13.89) 8 (22.22) 23 (63.89)
banks high deposit mobilization.
Both 15 (15.96) 16 (17.02) 63 (67.02)
352 The practical situation of savings in Adama AB, S.C 18 (31.03) 22 (37.93) 18 (31.03)
city shows that savings from disposable CBO, S.C 6 (16.67) 12 (33.33) 18 (50)
income of young, middle age and old people is
Both 24 (25.53) 34 (36.17) 36 (38.30)
almost similar.
353 Our bank use alternative strategies that can AB, S.C 15 (25.86) 5 (8.62) 38 (65.52)
improve savings from disposable income of CBO, S.C 4 (11.11) 6 (16.67) 26 (72.22)
young, middle age, and old people.
Both 19 (20.21) 11 (11.70) 64 (68.09)
354 In general, economic growth of the country AB, S.C 0 (0.00) 12 (20.69) 46 (79.31)
greatly support deposit performance of our CBO, S.C 1 (2.78) 6 (16.67) 29 (80.56)
bank.
Both 1 (1.06) 18 (19.15) 75 (79.79)
Weighted effect of economic growth or AB, S.C 7 (12.07) 13 (22.41) 38 (65.52)
disposable income CBO, S.C 0 (0.00) 8 (22.22) 28 (77.78)
Both 7 (7.45) 21 (22.34) 66 (70.21)
(S.C) agreed that economic growth contributes to increase disposable income and which
leads to the banks high deposit mobilization and hence reinforced deposits mobilization
efforts of the respective banks and considered it as the opportunity of mobilizing deposits
while 10 (17.24%) of the respondents from Awash Bank (S.C) and 5 (13.89%) from
Cooperative Bank of Oromia (S.C) agreed that it deterred deposits mobilization efforts of the
respective banks and considered it as the challenge of mobilizing deposits. Responses of the
respondents for the rest of items presented in Table 4.15 could be described in similar ways
by taking whether the items were constructed negatively or affirmatively into considerations
(Table 4.15). In aggregate, respondents of the Cooperative Bank of Oromia (S.C) (28
(77.78%)) and that of Awash Bank (S.C) (38 (65.52%)) perceived disposable income
(economic) growth increases deposit mobilization performance of the bank and hence good
disposable income (or economic) growth was an opportunity to mobilize deposits for both
banks but with greater emphasis in the case of the Cooperative Bank of Oromia (S.C).
From these findings, it is possible to infer that the disposable income (economic) growth was
a significant factor that either negatively or positively affects the banks efforts of mobilizing
71
deposits. Similarly, results of Fekadu Yosef done to investigate factors affecting deposit
mobilization: The case of Dashen Bank S.C for Addis Ababa branches reveal that
4.4.7. Market Study and Marketing Strategies’ Influences
Table 4.16: Influences of market study and applying marketing strategies on deposit
mobilization of Awash and Oromia Cooperative Banks in Adama city, 2020(94)
Challenges Neither Opportunitie
VII Section Seven: Market Study
ni (%) ni (%) s ni (%)
355 Our bank meets its target of deposit AB, S.C 9 (15.52) 17 (29.31) 32 (55.17)
performance by regularly conducting market CBO, S.C 5 (13.89) 8 (22.22) 23 (63.89)
study on customers test and preferences.
Both 14 (14.89) 25 (26.60) 55 (58.51)
356 Our bank sometimes creates new product/s, but AB, S.C 13 (22.41) 20 (34.48) 25 (43.10)
do not communicate well to customers and this CBO, S.C 6 (16.67) 7 (19.44) 23 (63.89)
resulted weak product sale.
Both 19 (20.21) 27 (28.72) 48 (51.06)
357 The bank is not managing customer AB, S.C 11 (18.37) 6 (10.34) 41 (70.69)
relationship management in a way that benefits CBO, S.C 3 (8.33) 11 (30.56) 22 (61.11)
the bank.
Both 14 (14.89) 17 (18.09) 63 (67.02)
358 Regular market study can positively contribute AB, S.C 2 (3.45) 4 (6.90) 52 (89.66)
to the banks deposit performance. CBO, S.C 1 (2.78) 3 (8.33) 32 (88.89)
Both 3 (3.19) 7 (7.45) 84 (89.36)
359 In general, application of alternative market AB, S.C 4 (6.90) 52 (89.66) 2 (3.45)
study could support the deposit mobilization CBO, S.C 4 (11.11) 26 (72.22) 6 (16.67)
effort of our bank.
Both 8 (8.51) 78 (82.98) 8 (8.51)
Weighted Market Study Impact AB, S.C 1 (1.72) 17 (29.31) 40 (68.37)
CBO, S.C 0 (0.00) 10 (27.78) 26 (72.22)
Both 1 (1.06) 27 (28.72) 66 (70.21)
(S.C) agreed that bank continuous efforts to meet its target of deposit performance by
regularly conducting market study on customers test and preferences was considered as the
opportunity of mobilizing deposits while 9 (15.52%) of the respondents from Awash Bank
(S.C) and 5 (13.89%) from Cooperative Bank of Oromia (S.C) agreed that it deterred deposits
mobilization efforts of the respective banks and considered it as the challenge of mobilizing
72

Bank of Oromia (S.C) (26 (72.22%)) and that of Awash Bank (S.C) (40 (68.37%)) perceived
the usage of market study and marketing strategies as the factor that increase deposit
mobilization performance of the bank and hence the usage of timely market study and
effective marketing strategies were the opportunities to mobilize deposits for both banks
except the presence of marginal differences between the respondents of the two respective
banks in Adama city.
From these findings, it is possible to infer that the usage of market study and marketing
strategies was a significant factor that either negatively or positively affects the banks efforts
of mobilizing deposits. Similarly, results of Fekadu Yosef done to investigate factors
affecting deposit mobilization: The case of Dashen Bank S.C for Addis Ababa branches
reveal that independent variables such as service quality, branch expansion, interest rate,
technology, disposable income and market strategy are positively and statistically significant
impact on the bank deposit growth and hence he conclude these independent variables are the
In addition to the above results, responses of the participants from branches of both banks
operating in Adama city revealed that sustainable growth, effectiveness, efficiency, good
service quality, high good will, applying corporate thinking, concern for society, integrity,
using up-to-dated technology, advertising the bank products, employing strong competitive
strategy, staff engagement, branch expansion, staff commitment for work and documentation
of service and product quality were the major strengths of the two banks with minor
differences between the branches of the two banks. Hence, it could be inferred that these
strengths of the two banks could serve as the opportunities for the banks in their efforts of
mobilizing deposits. However, the respondents mentioned lack of uniformity across the
branches, lack of corporate thinking, customer snatching, lack of staff engagement, poor
quality of employees of the banks in knowing their customers, giving less attention for
employees, lack of documentation quality, poor relationship between head office and
branches and poor service quality as the basic weaknesses of the branches of the two banks.
Thus, it could be concluded that these weaknesses of the banks were their challenges that
deterred their efforts of mobilizing adequate deposits over the past three years panel in
Adama city.
73
4.5. Associations between Dependent and Independent variables of Study

SPSS outputs for two-way ANOVA for the items that had statistically significant impacts on
deposits mobilization and found to be either the challenges of both banks’ branches or the
challenges of one of the bank’s branches but the opportunities for another one, and the
opportunities of both banks’ branches or the opportunities of one of the bank’s branches but
the challenges of another one that were operating in Adama city and covered in the study
separately and in interactions are presented in Tables 4.17 to 4.23.
Table 4.17: SPSS outputs for two-way analysis of variance (2-Way ANOVA) for the two
banks and their employees’ work experiences in years on the weighted ranks of the total
deposits mobilized by the branches of the banks in Adama city, 2020(94)
Tests of Between-Subjects Effects
Dependent Variable: Rank of branches based on total deposits mobilized
Source Type III Sum of Squares df Mean Square F Sig.
Corrected Model 11.364a 9 1.263 8.087 0.000
Intercept 131.518 1 131.518 842.376 0.000
Bank 5.113 1 5.113 32.747 0.000
Work Experiences 1.802 4 0.450 2.885 0.027
Bank * Work Experiences 1.400 4 0.350 2.242 0.071
Error 13.115 84 0.156
Total 373.000 94
Corrected Total 24.479 93
Model (or design) = Intercept + BANK + WORKEXP + BANK * WORKEXP
a. R Squared = .464 (Adjusted R Squared = .407)
As clearly evident from the above table (Table 4.17), the main effect of BANK was
significant (F(1,84)= 32.747; and the p-value = 0.000). From the estimated marginal means, the
mean values of total deposits mobilized by Awash Bank (S.C) (M = 299, 653, 222.41) was
significantly different from the mean values of total deposits mobilized by Cooperative Bank
of Oromia (S.C) (M = 181, 846, 666.67) (not collapsing across the five work experience
levels). Also, the main effect of work experiences was significant (F(4,84) = 2.885, p-value =
0.027). From the estimated marginal means, it can be seen that the Awash Bank (S.C)
employees years of work experiences was significantly more in the better work experiences
levels (M = 2.83 on nominal scale levels) than in the case of Cooperative Bank of Oromia
(S.C) Work Experiences (M = 2.53 on nominal scale levels) (not collapsing across the two
BANKS’ levels). But, there was no statistically significant interaction effect for the banks
and work experiences (F(4,84) = 2.242, p-value = 0.071) on the ranks of total deposits
mobilized by the two banks’ branches in Adama city. Thus, work experiences of respondents
found to be an opportunity for Awash Bank (S.C) but it was the challenge for Cooperative
Bank of Oromia (S.C) as there was statistically significant association between work
74
experiences and rank of overall mobilized deposit (F(4,84) = 2.885 and p-value = 0.027); and
there were statistically significant differences in the overall rank of mobilized deposits
between the two banks (F(1,84) = 32.747 and p-value = 0.000). Moreover, the coefficient of
Spearman’s correlation value for ranked overall mobilized deposits and work experiences of
respondents from Cooperative Bank of Oromia (S.C) was negative but it was positive for
participants from Awash Bank (S.C) (Results were not presented here).
banks and the most significant group of depositors of the banks on the weighted ranks
of the total deposits mobilized by the branches of the banks in Adama city, 2020(94)
Dependent Variable: Rank of branches based on total deposit mobilized
Intercept 72.416 1 72.416 446.628 0.000
BANK 6.150 1 6.150 37.929 0.000
Q201 2.405 5 0.481 2.967 0.016
BANK * Q201 .301 1 0.301 1.857 0.177
Error 13.944 86 0.162
Total 373.000 94
Model (or design) = Intercept + BANK + Q201 + BANK * Q201
of Oromia (S.C) (M = 181, 846, 666.67) (not collapsing across the six most significant
groups of depositors of the banks’ mobilized deposits rank levels). Also, the main effect of
group of customers who were the most significant depositors of their banks in terms of the
size of deposits (F(5,86) = 2.967, p-value = 0.016). From the estimated marginal means, it can
be seen that the Awash Bank’s (S.C) groups of top significant depositors was significantly in
the lower levels (M = 1.09 on nominal scale levels) than in the case of Cooperative Bank of
Oromia’s (S.C) groups of top significant depositors (M = 2.86 on nominal scale levels) (not
collapsing across the two BANKS’ levels). But, there was no statistically significant
interaction effect for the banks and groups of top significant depositors (F(1,86) = 1.857, p-
value = 0.177) on the ranks of total deposits mobilized by the two banks’ branches in Adama
city. Thus, individuals and business organizations were the opportunities for Awash Bank
(S.C) but they were the challenge for Cooperative Bank of Oromia (S.C) whereas the other
75
groups of top significant depositors were the opportunities for the Cooperative Bank of
Oromia (S.C) but they were the challenges in the case of Awash Bank (S.C) as there was
statistically significant differences between the branches of the two banks in terms of groups
of top significant depositors of the banks (F5, 86 = 2.967 and p-value = 0.016); and there were
statistically significant differences in the overall rank of mobilized deposits between the two
banks (F(1,86) = 37.929 and p-value = 0.000). Moreover, the coefficient of Spearman’s
correlation value for ranked overall mobilized deposits and groups of top significant
depositors of the banks for Cooperative Bank of Oromia (S.C) and Awash Bank (S.C) was
negative (Results were not presented here).
banks and the numbers of branches the banks had on the weighted ranks of the total
Intercept 82.446 1 82.446 512.984 0.000
BANK 2.442 1 2.442 15.193 0.000
Q203 1.065 3 0.355 2.210 0.093
BANK * Q203 2.165 3 0.722 4.490 0.006
Error 13.822 86 0.161
Total 373.000 94
of Oromia (S.C) (M = 181, 846, 666.67) (not collapsing across the four numbers of branches
that the banks had). However, the main effect of numbers of branches that the banks had was
not significant (F(3,86) = 2.210, p-value = 0.093). From the estimated marginal means, it can
be seen that the average numbers of branches that Awash Bank (S.C) had in Adama city was
not significantly higher (M = 2.93 on nominal scale levels) than in the easy list (M = 2.78 on
nominal scale levels) (collapsing across the two BANKS’ levels). Nevertheless, there was
statistically significant interaction effect for the banks and numbers of branches that the
banks had (F(3,86) = 4.490, p-value = 0.006) on the ranks of total deposits mobilized by the
two banks’ branches in Adama city.
76
banks and the cause for the difference in deposit mobilization among the branches on
the weighted ranks of the total deposits mobilized by the branches of the banks in
Corrected Model 11.063a 12 .922 5.566 0.000
Intercept 62.085 1 62.085 374.851 0.000
BANK 4.279 1 4.279 25.836 0.000
Q207 2.764 8 0.345 2.086 0.047
BANK * Q207 .071 3 0.024 0.143 0.934
Error 13.416 81 0.166
Total 373.000 94
of Oromia (S.C) (M = 181, 846, 666.67) (not collapsing across the nine cause for the
difference in deposit mobilization among the branches of the two banks’ levels). Also, the
main effect of the reasons for the differences in deposit mobilization among the branches of
the two banks was significant (F(8,81) = 2.086, p =0.047). From the estimated marginal means,
it can be seen that the reasons for the differences in deposit mobilization among the branches
of the two banks were significantly better for Awash Bank (S.C) (M = 4.45 on nominal scale
levels) than for Cooperative Bank of Oromia (S.C) (M = 3.33 on nominal scale levels) (not
collapsing across the two BANKS’ levels). But, there was no statistically significant
interaction effect for the banks and the reasons for the differences in deposit mobilization
(F(3,81) = 0.143, p-value = 0.934) on the ranks of total deposits mobilized by the two banks’
branches in Adama city. Thus, the reasons for the differences in deposit mobilization were in
favor of Awash Bank (S.C) than the Cooperative Bank of Oromia (S.C), so that the
mentioned reasons for the differences in deposit mobilization were the opportunities for
Awash Bank (S.C) but they were the challenges for Cooperative Bank of Oromia (S.C) as
there was statistically significant association between the reasons for the differences in
deposit mobilization and rank of overall mobilized deposit (F(8,81) = 2.086, p-value =0.047);
77
and there were statistically significant differences in the overall rank of mobilized deposits
between the two banks (F(1,81)= 25.836; and the p-value=0.000).
banks and weighted provision of service quality on the weighted ranks of the total
Intercept 64.919 1 64.919 416.256 0.000
BANK 3.051 1 3.051 19.565 0.000
WSerQ 1.061 3 0.354 2.268 0.086
BANK * WSerQ 1.461 2 0.731 4.685 0.012
Error 13.569 87 0.156
Total 373.000 94
Model (or design) = Intercept + BANK + WSerQ + BANK * WSerQ
significant (F(1,87)= 19.565; and the p-value=0.000). From the estimated marginal means, the
of Oromia (S.C) (M = 181, 846, 666.67) (not collapsing across the four weighted Likert
Scales of service quality levels). But, the main effect of weighted service quality was not
significant (F(3,87) = 2.268, p-value = 0.086). From the estimated marginal means, it can be
seen that the weighted service quality of Awash Bank (S.C) (M = 3.81 on nominal scale
levels) was nearly equal to the weighted service quality of the Cooperative Bank of Oromia
(S.C) (M = 3.83 on nominal scale levels) (not collapsing across the two BANKS’ levels). In
contrary, there was statistically significant interaction effect for the banks and the weighted
service quality (F(2,87) = 4.685, p-value = 0.012) on the ranks of total deposits mobilized by
the two banks’ branches in Adama city.
banks and weighted market study and marketing strategies on the weighted ranks of
the total deposits mobilized by the branches of the banks in Adama city, 2020(94)
a
Corrected Model 9.741 5 1.948 11.632 0.000
Intercept 87.661 1 87.661 523.416 0.000
BANK 5.680 1 5.680 33.913 0.000
78
WIntrstRate 1.732 3 0.577 3.447 0.020

BANK * WIntrstRate .006 1 0.006 0.034 0.855
Error 14.738 88 0.167
Total 373.000 94
Model (or design) = Intercept + BANK + WIntrstRate + BANK * WIntrstRate
Scales of Interest Rates’ levels). Also, the main effect of weighted interest rates was
significant (F(3,88) = 3.447, p-value = 0.020). From the estimated marginal means, it can be
seen that the weighted interest rates and its impacts for Awash Bank (S.C) (M = 3.72) was
greater than that of the Cooperative Bank of Oromia (S.C) (M = 3.67) (not collapsing across
the two BANKS levels). But, there was no statistically significant interaction effect for the
banks and weighted interest rates (F(1,88) = 0.034, p-value = 0.855) on the ranks of total
deposits mobilized by the two banks’ branches in Adama city.
banks and weighted market study and marketing strategies on the weighted ranks of
the total deposits mobilized by the branches of the banks in Adama city, 2020(94)
Intercept 43.145 1 43.145 297.149 0.000
BANK 5.374 1 5.374 37.010 0.000
WMarkStud .217 3 .072 0.499 0.684
BANK * WMarkStud 3.615 2 1.807 12.447 0.000
Error 12.632 87 0.145
Total 373.000 94
Model (or design) = Intercept + BANK + WMarkStud + BANK * WMarkStud
79
Scales of market study and marketing strategies levels). But, the main effect of weighted
market study and marketing strategies was not significant (F(3,84) = 0.499,the p-value =
0.684). From the estimated marginal means, it can be seen that the weighted market study and
marketing strategies for Awash Bank (S.C) (M = 3.69 on nominal scale levels) had no
significant statistical difference from that of the Cooperative Bank of Oromia (S.C) (M = 3.75
on nominal scale levels) (collapsing across the two BANKS’ levels). In contrary, there was
statistically significant interaction effect for the banks and the weighted market study and
marketing strategies (F(2,87) = 12.447, and the p-value = 0.000) on the ranks of total deposits
mobilized by the two banks’ branches in Adama city.
80
CHAPTER FIVE
5: SUMMARY, CONCLUSIONS AND RECOMMENDATIONS
5.0. Introduction
This chapter presented the summary of the findings of the study. It also forwarded thematical
conclusions based on the major findings of the study. Finally, appropriate and relevant
recommendations and suggestions were forwarded based on the findings and identified gaps
of the study.
5.1. Summary of Major Findings
Based on the analyses and discussion made, the following major summaries of findings were
drawn. Most respondents had 4-6 years of work experiences and were followed by those that
had 7-10 years of work experiences in aggregate. Employees of Awash Bank (S.C) that had
4-6 years, 11-13 years and 7-10 years of work experiences been significantly higher than
their corresponding counterparts for the Cooperative Bank of Oromia (S.C). Similarly, the
job titles of the respondents from these banks found to follow the same pattern.
banks were 254, 535, 818.10 and 271,221, 000 ETB respectively. Majority of the branches of
these banks were medium deposit mobilizers and followed by low level deposit mobilizers.
On the average, the overall amount of deposits mobilized by Awash Bank (S.C) was greater
than the average amount of deposits mobilized by Cooperative Bank of Oromia (S.C) over
the past three fiscal years.
The deposit mobilization levels of Awash Bank (S.C) predominantly belonged to the medium
level of deposit mobilization and all the rest were high level of deposit mobilizers for both
demand deposit and saving deposit as well as overall deposit mobilization performance while
majority of the Cooperative Bank of Oromia (S.C) were low demand deposit mobilizers and
followed by medium mobilizers for demand deposit performance and similar trend held true
for saving deposit mobilization performance but medium level of deposit mobilizers
accounted for greater percentage and was followed by low deposit mobilizers for both types
of deposits covered in the study while high level of both deposit mobilizers were the least one
respectively. In aggregate, levels of deposit mobilizations of both banks’ branches in Adama
city were predominantly medium followed by low consecutively. Total deposit mobilization
performance levels of Awash Bank (S.C) ranked only medium and high; and were greater
than that of Cooperative Bank of Oromia (S.C) which belonged to the same ranking.
81
There were statistically significant differences between the mean values of Awash Bank’s
and Cooperative Bank of Oromia’s in three years panel demand deposits mobilized, that of
saving deposits, and that of the overall deposits mobilized respectively under the assumption
of the equality of variances. Also, the Levene’s test for equality of variances for the demand
deposits and for the saving deposits and for the aggregate deposits mobilized by the banks
revealed that there significant differences between the Awash Bank (S.C) and the
Cooperative Bank of Oromia (S.C) correspondingly.
Individual customers were the most significant depositors of Awash Bank (S.C) than the
Cooperative Bank of Oromia (S.C) and were followed by business organizations. However,
individual customers were also the most significant depositors of the Cooperative Bank of
Oromia (S.C) even though they represented nearly half of that of the Awash Bank (S.C) and
were followed by Cooperative Unions, other types of depositors, business organizations and
the possible combinations of the former depositor types. Unlike Awash Bank (S.C),
Cooperative Unions, government entities and any possible combination of them unique to
branches of this bank only.
A saving deposit had the most significant deposit volume in both the Awash Bank (S.C) and
Cooperative Bank of Oromia (S.C) and was followed by current account deposits and fixed
time deposits in the case of Awash Bank (S.C) each of them representing equally volumes of
deposits while it was followed by fixed time deposits in the case of Cooperative Bank of
Oromia (S.C).
Both banks were equally increasing their branches in Adama city with marginal higher extent
for Cooperative Bank of Oromia (S.C) as compared Awash Bank (S.C). They attributed their
reasons why both banks were increasing their branches in Adama city to the following
factors; namely, deposit mobilization, provision of loan facilities, to have a large number of
branches, to increase customer base and to collect foreign currency among many other
reasons as the most important factors in relation to the levels of overall deposit mobilization
performance and with regards to the types of banks.
The volumes of deposit mobilized by respective branches of their banks differ in comparable
levels in Adama city. They attributed the reasons for the differences in volumes of deposits
mobilized by their respective bank’s branches to convenience of bank branch, proximity to
home or job, provision of good services, awareness of the society, general appearance of
office & materials, and every possible combination of these reasons.
Higher proportions of the respondents of both Banks agreed that the cost of mobilizing
deposits was increasing from year to year; and among the factors stated by them for
82
increment in the costs of mobilizing deposits such as attractive interest rate, product disparity
(card banking, internet banking, mobile banking, etc.), literacy about saving, the service
given by the bank, convenience of the branch, branch expansion and increase in citizens per
capita income were worth mentionable.
There were stiff competitions among local banks for deposit mobilization currently among
the branches of Awash Bank and Cooperative Bank of Oromia, and also other types of
private and governmental banks. They argued by stating that the urge to give a better
dividend to shareholders, to increase the profit, to increase market share, to make sustainable
growth and all or any possible combination of these as the possible reasons for presence of
stiff competitions among all local banks operating in the particular study settings for deposit
mobilization currently in general and specifically among the branches of Awash Bank and
Cooperative Bank of Oromia in particular.
Moderate competition was higher than stiff competition for both banks. Privately owned
banks and both government and privately owned banks were the competitors of both banks in
descending order.
The respondents evaluated the understanding and commitment of staffs for deposit
mobilization as poor, satisfactory, good and very good for respondents from Awash Bank and
Cooperative Bank of Oromia. They measured the contribution of various new products on
deposit accounts introduced by their corresponding banks as satisfactory, good and very good
for respondents from Awash Bank and Cooperative Bank of Oromia. The convenience of
branch office and/or location, availability of parking areas, effort of the branch staffs and
most of the surrounding society of the branch are/are not/ identified target customers of the
bank were the major cause for the variation in deposit mobilization among branches of their
banks. Commercial Bank of Ethiopia, Dashen Bank, Cooperative Bank of Oromia and Awash
Bank were rated as banks that posed more competition to their banks.
In aggregate, most respondents of the Cooperative Bank of Oromia (S.C) and that of Awash
Bank (S.C) perceived application of service quality increases deposit mobilization
performance of the bank and hence provision of quality services was an opportunity to
mobilize deposits for both banks except the presence of marginal differences between the
respondents of the two respective banks. Branch expansion was perceived by the majority of
the respondents of the Cooperative Bank of Oromia (S.C) and that of Awash Bank (S.C) as
fundamental phenomena of both banks and similar proportions of the respondents agreed that
branch expansion that took population growth and customers into considerations to greatly
contribute towards the banks efforts of mobilizing deposits and hence branch expansion that
83
took population growth and customers into considerations was an opportunity to mobilize
adequate deposits for both banks except the presence of marginal differences between the
respondents of the two respective banks. Provision of reasonable interest rates positively
contributes towards deposit mobilization performance of the bank and hence provision of
reasonable interest rates was an opportunity to mobilize deposits for both banks but with
greater emphasis in the case of the Awash Bank (S.C). Perceived usage of proper and
relevant modern technologies can facilitate and strengthen deposit mobilization performance
of the bank and hence usage of proper and relevant modern technologies was an opportunity
to mobilize deposits for both banks but with greater emphasis in the case of the Awash Bank
(S.C). Perceived disposable income (economic) growth increases deposit mobilization
performance of the bank and hence good disposable income (or economic) growth was an
opportunity to mobilize deposits for both banks but with greater emphasis in the case of the
Cooperative Bank of Oromia (S.C). The usage of market study and marketing strategies as
the factor that increase deposit mobilization performance of the bank and hence the usage of
timely market study and effective marketing strategies were the opportunities to mobilize
deposits for both banks except the presence of marginal differences between the respondents
of the two respective banks in Adama city.
Sustainable growth, effectiveness, efficiency, good service quality, high good will, applying
corporate thinking, concern for society, integrity, using up-to-dated technology, advertising
the bank products, employing strong competitive strategy, staff engagement, branch
expansion, staff commitment for work and documentation of service and product quality
were the major strengths of the two banks with minor differences between the branches of the
two banks. However, lack of uniformity across the branches, lack of corporate thinking,
customer snatching, lack of staff engagement, poor quality of employees of the banks in
knowing their customers, giving less attention for employees, lack of documentation quality,
poor relationship between head office and branches and poor service quality as the basic
weaknesses of the branches of the two banks.
The main effect of BANK was significant. From the estimated marginal means, the mean
values of total deposits mobilized by Awash Bank (S.C) was significantly different from the
mean values of total deposits mobilized by Cooperative Bank of Oromia (S.C). Also, the
main effect of work experiences was significant. From the estimated marginal means, it can
be seen that the Awash Bank (S.C) employees’ years of work experiences was significantly
more in the better work experiences levels than in the case of Cooperative Bank of Oromia
(S.C) work experiences. But, there was no statistically significant interaction effect for the
84
banks and work experiences on the ranks of total deposits mobilized by the two banks’
branches in Adama city. Thus, work experiences of respondents found to be an opportunity
for Awash Bank (S.C) but it was the challenge for Cooperative Bank of Oromia (S.C) as
there was statistically significant association between work experiences and rank of overall
mobilized deposit; and there were statistically significant differences in the overall rank of
mobilized deposits between the two banks.
The main effects of group of customers were significant depositors of the branches of the two
banks in terms of the size of deposits. From the estimated marginal means, it can be seen that
the Awash Bank’s (S.C) groups of top significant depositors was significantly in the lower
levels than in the case of Cooperative Bank of Oromia’s (S.C) groups of top significant
depositors. But, there was no statistically significant interaction effect for the banks and
groups of top significant depositors on the ranks of total deposits mobilized by the two banks’
branches in Adama city. Thus, individuals and business organizations were the opportunities
for Awash Bank (S.C) but they were the challenge for Cooperative Bank of Oromia (S.C)
whereas the other groups of top significant depositors were the opportunities for the
Cooperative Bank of Oromia (S.C) but they were the challenges in the case of Awash Bank
(S.C). The main effect of numbers of branches that the banks had was not significant. From
the estimated marginal means, it can be seen that the average numbers of branches that
Awash Bank (S.C) had in Adama city was not significantly higher than in the easy list.
Nevertheless, there was statistically significant interaction effect for the banks and numbers
of branches that the banks had on the ranks of total deposits mobilized by the two banks’
branches in Adama city.
5.2. Conclusions
banks were 254, 535, 818.10 and 271,221, 000 ETB; 17.02 percent were low deposit
mobilizers while 73.40 percent were medium deposit mobilizers and the rest were high
deposit mobilizers (9.57%). On the average, the overall amount of deposits mobilized by
Awash Bank (S.C) was greater than the average amount of deposits mobilized by
Cooperative Bank of Oromia (S.C) over the past three fiscal years.
There were statistically significant differences between the mean values of Awash Bank’s
and Cooperative Bank of Oromia’s in three years panel demand deposits mobilized, that of
saving deposits, and that of the overall deposits mobilized. Also, the Levene’s Test for
Equality of Variances for the demand deposits, for the saving deposits and for the aggregate
85
deposits mobilized by the banks. These findings demonstrate that Awash Bank (S.C) was
relatively more effective in mobilizing demand deposits, saving deposits and overall deposits
than the Cooperative Bank of Oromia (S.C).
Branches of both banks were not effective enough in mobilizing various types of deposits
which could be attributable to a number challenges and obstacles such as political instability,
social unrest, occurrence of frequent and periodically recurring conflicts among different
ethnic groups, and so on.
Having larger proportions of employees that had higher years of work experiences was an
opportunity for Awash Bank (S.C) while it was a challenge for cooperative bank of Oromia
(S.C). By the same token, the fact that Awash Bank (S.C) had larger proportions of
employees who hold a better job title was an opportunity for Awash Bank (S.C) while it was
a challenge for cooperative bank of Oromia (S.C). Whether educational qualification might
be either an opportunity for both or the potential challenges for both of them or the challenge
for one while it might be an opportunity for another one was not determined certainly as their
proportions for both banks were comparable. Awash Bank (S.C) was more effective in
mobilizing demand deposits, saving deposits and overall deposits than the Cooperative Bank
of Oromia (S.C).
There were differences between Cooperative Bank of Oromia (S.C) and Awash Bank (S.C) in
terms of the most important depositors. The fact that Cooperative Unions deposit their
deposits only in the Cooperative Bank of Oromia (S.C) could be an opportunity for it while it
was a challenge for Awash Bank (S.C) as the sum of money mobilized and deposited by
cooperative unions was large and stay in the bank for longer period of time unlike other types
of depositors. Awash Bank (S.C) was unable to attract customers for saving deposits as
compared to the Cooperative Bank of Oromia (S.C). The presences of stiff competitions
among local banks for deposit mobilization currently among the branches of Awash Bank
and Cooperative Bank of Oromia as well as other types of private and governmental banks
were the actual challenges they faced to mobilize deposits. Moderate competition was higher
than stiff competition for both banks. Privately owned banks and both government and
privately owned banks were the competitors of both banks in descending order.
There were several challenges that deterred and many opportunities that promoted
mobilization of deposits by Awash Bank (S.C) and the Cooperative Bank of Oromia (S.C).
Some challenges were the same for branches of both banks and there were opportunities that
were similar across their branches in Adama city. However, a few challenges and
opportunities were specific to either of the bank. Among many others, perceived application
86
of service quality increases deposit mobilization performance of the bank and hence
provision of quality services was an opportunity to mobilize deposits for both banks except
the presence of marginal differences between the respondents of the two respective banks.
Branch expansion that took population growth and customers into considerations perceived to
greatly contribute towards the banks efforts of mobilizing deposits and hence branch
expansion that took population growth and customers into considerations was an opportunity
to mobilize adequate deposits for both banks except the presence of marginal differences
between the respondents of the two respective banks. Provision of reasonable interest rates
positively contributes towards deposit mobilization performance of the bank and hence
provision of reasonable interest rates was an opportunity to mobilize deposits for both banks
but with greater emphasis in the case of the Awash Bank (S.C). Perceived usage of proper
and relevant modern technologies can facilitate and strengthen deposit mobilization
performance of the bank and hence usage of proper and relevant modern technologies was an
opportunity to mobilize deposits for both banks but with greater emphasis in the case of the
Awash Bank (S.C). Perceived disposable income (economic) growth increases deposit
mobilization performance of the bank and hence good disposable income (or economic)
growth was an opportunity to mobilize deposits for both banks but with greater emphasis in
the case of the Cooperative Bank of Oromia (S.C). The usage of market study and marketing
strategies as the factor that increase deposit mobilization performance of the bank and hence
the usage of timely market study and effective marketing strategies were the opportunities to
mobilize deposits for both banks except the presence of marginal differences between the
respondents of the two respective banks in Adama city.
5.3. Recommendations
Based on the major deterring and hindering factors or challenges that significantly affected
the total volume of mobilized deposits and volumes of each types of deposits mobilized by
the branches of the two banks in Adama city, the following recommendations and
suggestions are forwarded. These are:
Both banks failed to mobilize adequate deposits due to various reasons or challenges. Thus,
in order to overcome the adverse impacts of these factors or challenges that are actually and
potentially deterring deposits mobilization efforts of the banks, the branches of the two banks
should give arranging accessible and disbursable loan facilities for clients, training of its
employees, giving foreign currency, using different strategies, giving appreciation letters for
top depositors, using up-to-dated technologies, requesting feedback form customers,
87
organizing team work, improving good relation with top depositors who can attract other
depositors, empowering employees by delegation as well as through the provision of timely
and related training and development, creating new products, creating customer awareness,
creating good relationship with customers, creating team spirit, using reward program,
inviting top customers on various get together occasions, using latest banking technology,
taking individual action plans into considerations, providing good services and quality
products, managing time effectively, working with primary cooperatives and their unions,
communicating with customers, using cross-selling and upselling techniques, using digital
banking, improving human resource capacity, using highly trained human resources,
providing excelling services, launching deposit mobilization campaigns continuously,
promoting and advertising their services and new products as much as needed, insuring
customer services and providing mass based services due emphases,
It is advisable if the managers of the branches, middle- and top-level executive managers of
both banks consider using advertisement through various media like mini media, TV, mass
media, broacher & magazines, using customer as a wallet share, Introducing new
technologies and products, launching marketing campaign programs, informing customers’
about the bank’s business competitive advantages, using well-organized and effective
communication with customers, providing new technologies through various occasions,
launching deposit mobilization campaigns, using door to door promotion and creating new
products in their continuous endeavor to mobilize adequate deposits,
Giving due considerations to the recommendations and suggestions of the Basel II and Basel
III regulations and supervision techniques that emphasis strategies dealing with how to
maintain, become sustainability growing and profitable industry during special occasions
such as economic recessions, political instability, social unrest and periods of frequent and
recurring conflicts, wars and massive population movements as well as how to mobilize
adequate and sufficient deposits under such circumstances are important if the managers of
the branches, middle- and top-level executive managers of both banks pay special attentions
to these issues,
It is important if the top- and middle-management bodies give due emphasis for using
suggestion boxes, employing face to face talking approaches, using influential persons,
rewarding and/or encouraging top depositors, communicating with customers through
telephone, maintaining sustainable growth, using referral market, communicating customers
through letters and engaging banks’ staffs in the plans and decisions of deposits
mobilizations, and
88
Finally, I like to suggest developing evidence-based strategies that revise their weaknesses
and revisit their strengths and implementing it routinely and constantly to tackle and
minimize negative impacts of their challenges to mobilize deposits and also to strengthen
their strengths towards the same ends for the managers of the branches, middle- and top-level
executive managers of both banks.
89
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private commercial banks in Adama town. International Journal of Science and
Research, 12(3):18-32.
Voon-Choong, Y., Hway-Boom, O., Kok-Thim, C. and Yueh-Sin, A. (2010). Factors
Affecting Banks’ Risk Exposure: Evidence from Malaysia. European Journal of
Economics, Finance and Administrative Sciences.
Wubitu, E. (2012). Factors Determining Commercial Bank Deposits- An Empirical Study on
Commercial Bank of Ethiopia. Addis Ababa, Ethiopia: University of Addis Ababa.
International Review of Management and Marketing, 8(5):2018-2042.
Zerayehu Sime, Kagnew Tesome, Teshome Abebe (2013). Competition in Ethiopian Banking
Industry. African Journal of Economics, 1(5):176-190.
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Zewdu, G. A. (2014). Financial Inclusion, Regulation and Inclusive growth in Ethiopia.

Overseas Development institution, Addis Ababa.
Zillur Rahman, A. K. (2015). Money Supply Growth and Free town: West African Monetary
Agency (WAMA). International Journal of Bank Marketing. Emerald Insight, 96-121.
Directives
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Banking Business Proclamation No.84/1994 (1994). Minimum Capital Requirement
for Banks.
99
7: APPENDIX
7.1. Appendix II: Semi-Structured Questionnaires
General Directions
1. Do not attempt to answer any item unless you have understood it or them very well.
Study Code: ---------------------------- Name of the Bank --------------------------------------
Name of the branch -------------------------------------------
Part I: Socio-demographic Characteristics of the Respondents

Directions: The following questions ask about your personal information. Compilation & confidentiality of the
information will be made with due care. No individual data will be reported. Please put “√”or “X” Mark in front
of the chosen options for each of the item you have attempted.
SN Items Options Remarks
101 Gender [or Sex] 0=Female
1=Male
102 Your highest level of education 1=Diploma
2=First Degree
3=Master’s Degree
4=PhD
103 Years of work experience 1=1 to 3 years
2=4 to 6years
3=7 to 10 years
4=11 to 13 years
5=Above 13 years
104 Your Job Title 1= Branch Manager
2= Assistant branch manager
3= Senior Customer Service Officer
4= Deposit Mobilizing Team
Member
5= Marketer
Part II. General Determinants of Deposit Mobilization

Directions: The following questions ask about you general determinants of deposit mobilization by the bank for
which you are working for. Please put “√”or “X” Mark in front of the chosen options for each of the item you
have attempted regarding general determinants of deposit mobilization.
SN Items Options
201 Which group of customers are the most 1= Individual customers
2= Business organizations
significant depositors of your bank in
3= Government entity
terms of the size of deposits? 4= Cooperative Unions
5= NGOs
6= If others specify
202 Which deposit type has the most 1= Savings account deposits
2= Current account deposits
significant deposit volume?
3= Fixed time deposits
4= If others, specify
203 How many branches does your bank 1= Less than 10 branches
2= 10-15 branches
have as of the year ended June 30, 2019
3= 16-20 branches
in Adama city? 4= 21-25 branches
100
5= More than 25 branches

204 Is your bank increasing the number of its 0=No
branches every year in Adama city? 1=Yes
205 If your answer for Number 12 above is 1= Deposit mobilization
2= It gives loan facility
‘Yes’ what do you think is the main
3= To have a large number of branches
reason for the branch expansion? 4= To increase customer base
5= To collect foreign currency
6= Other reasons (specify)
206 Does the volume of deposit mobilized 0=No
by respective branches of your bank 1=Yes
differ? 2=I do not know
207 What do you think is the cause for the 1= Convenience of bank branch
2= Proximity to home or job
difference in deposit mobilization
3= Provision of good services
among the branches? 4= Awareness of the society
5= General appearance of office & materials
6= Convenient working Hours
7= Low cost/charges
208 Does the volume of deposit mobilized 0=No
by your bank grow year to year? 1=Yes
2=I do not know
209 If your answer is ‘yes’, what could be 1= Attractive interest rate
2= Product disparity (card banking, internet banking,
the reason?
mobile banking, etc.)
3= Literacy about saving
4= The service given by the bank
5= Convenience of the branch
6= Branch expansion
7= Increase in citizens per capita income
8= Others, please specify
210 Which of the following transaction costs 1= The interest rate paid on deposits
2= Cost of fuel or transportation to mobilize deposit
affect the volume of deposit in the bank?
3= The cost of stationery and office supplies
(Multiple answers can be given) 4= The advertising and publicity cost
5= Cost of renting offices
6= Costs related to publicity, promotion such prizes and
gifts
7= Costs related to recruiting, placing and training
bankers for deposit mobilization purpose
8= Others, please specify
211 Is the cost of mobilizing deposits 0=No
increasing year to year? 1=Yes
212 Which of the following factors do you 1= Saving interest rate
2= Economic development of the country
think affect the volume of deposits of the
3= The money supplied by government (by printing
bank? (Multiple answers can be given) money)
4= The number of branches opened
5= Inflation increase in per capita income
6= Quality customer service
7= If others please specify
101
Part III: Challenges and Opportunities of Deposit Mobilization

Sub-Section A: Close-ended Items on the Potential Challenge and Opportunity
Instruction: Please read each question item very carefully and thoroughly; and then indicate your response by
circling the alternative(s) of your choice(s) or by writing the correct answers for the items that have no
alternatives.
SN Items Options
301 Do you think that there is stiff competition among 0=No
local banks for deposit mobilization currently? 1=Yes
302 What are the possible reasons for stiff competition? 1= To give a better dividend to shareholders
2= To increase the profit
3= To increase market share
4= To make sustainable growth
303 How do you see the competition with other private 1= Weak
2= Moderate
and government owned banks?
3= Stiff
304 Is government owned or privately owned banks highly 1= Government owned banks
2= Privately owned banks
compete with your bank?
3= Both Government and private banks
305 What do you think are the main challenges of your 1= Competition from other banks
2= More banks joined the market
bank in mobilizing deposits? [Note: Multiple
3= Lack of technology
responses are possible] 4= Lack of trained manpower
5= Small number of branches
(inaccessibility)
6= Government laws/regulations
7= Government participation in banking
industry
8= Political instability
9= Shocks and riots
10= Inter-ethnic conflicts
306 What mechanisms does the bank use to 1) ___________________________
encourage/motivate deposit mobilization efforts made 2) ___________________________
by its branches? [List all of them in descending orders 3) ___________________________
of priority] 4) ___________________________
5) ___________________________
Add if there are others or more
307 How do you evaluate the understanding and 1= Poor
commitment of staffs for deposit mobilization? 2= Satisfactory
3= Good
4= Very Good
308 Recently, the bank has introduced various new 1= Poor
products on deposit accounts. How do you measure 2= Satisfactory
their contribution in the effort to mobilize deposit? 3= Good
4= Very Good
309 What has been done in your bank to promote 1) ___________________________
awareness of the society pertaining to your services? 2) ___________________________
3) ___________________________
4) ___________________________
5) ___________________________
310 What special services or new products on deposit 1= Game deposit
2= Youth deposits
accounts do the bank provides for corporate
3= Sinqqee deposits
depositors/customers? 4= Cooppay deposit
5= Others, specify
102
311 Does the volume of deposits grow because of such 0=No

special services provided for the corporate depositors? 1=Yes
312 How do you rate your customers’ satisfaction? 1= Poor
2= Satisfactory
3= Good
4= Very Good
313 What tools or techniques do customers have to 1) ___________________________
express their satisfaction/dissatisfaction? 2) ___________________________
3) ___________________________
4) ___________________________
5) ___________________________
314 What are the strengths and weaknesses of the current
deposit mobilization efforts/practices of the bank:
A Strength 1) ___________________________
2) ___________________________
3) ___________________________
4) ___________________________
5) ___________________________
B Weakness 1) ___________________________
2) ___________________________
3) ___________________________
4) ___________________________
5) ___________________________
315 What is the major cause for the variation in deposit 1= Convenience of branch office and/or
location
among branches of your bank? [Note: Multiple
2= Availability of parking areas
responses are possible] 3= Effort of the branch staffs
4= Most of the surrounding society of the
branch are/are not/ identified target
customers of the bank
316 How much time does it take for a customer to open a 1= Less than 10 minutes
2= 10 to 30 minutes
new account in your bank?
3= More than 30 minutes
317 How much time does it take for a customer to 1= Less than 10 minutes
2= 10 to 30 minutes
withdraw or deposit cash from (to) his account?
3= More than 30 minutes
318 As per the annual reports, total deposit of your bank is 1= Societies’ preference to deposit their
savings than other investment
continuously growing during the last five years. What
2= Our banks have many branches and larger
is the main reason? [Note: Multiple responses are market share from private banks
3= The service given by the bank
possible]
4= The goodwill of the bank
319 Who do you think are major depositors of your bank? 1= Individual customers
2= Investors
[Note: Multiple responses are possible]
3= Cooperative unions
4= Business organizations
5= NGOs
6= Government entity
320 Which banks pose more competition to your bank? 1= Commercial Bank of Ethiopia
2= Construction and Business Bank
[Note: Multiple responses are possible]
3= Dashen Bank
4= Abyssinia Bank
5= Wegagen Bank
103
6= United Bank
7= Nib International Bank
8= Cooperative Bank of Oromia
9= Awash Bank
10= Other Private banks
321 Planned and actual amounts of deposits Mobilized per specific kind of deposits (Objective 1)
Year Plan (in ETB) Performance
2007 (2014/15) Demand Deposit
Savings Deposit
Time Deposit
Other Deposit Types
All deposits
Savings Deposit
Time Deposit
Other Deposit Types
All deposits
Savings Deposit
Time Deposit
Other Deposit Types
All deposits
Savings Deposit
Time Deposit
Other Deposit Types
All deposits
Savings Deposit
Time Deposit
Other Deposit Types
All deposits
322 Does your bank provide loans and credit services for individuals, cooperative 0=No
unions, MSMSEs, etc.? 1=Yes
2=I do not know
323 Does your bank have deposit mobilization team? 0=No
1=Yes
104
Sub-Section B: Potential Challenges & Opportunities

Instructions: Please indicate the level of your agreement or disagreement for each question based on the
following options or scales of agreement/disagreement: 1- Strongly disagree; 2- Disagree; 3- Neutral; 4- Agree;
5- Strongly agree, by putting “√” or “X” mark for the correct number scale that corresponds to your choice for
each of the items correspondingly.
SN Items Options
1 2 3 4 5
I Section one: Service Quality
324 Among the dimensions of service quality i.e. reliability, responsiveness, assurance,
empathy, and tangibles, the short fall on RESPONSIVENESS has significant
negative impact on the resource or deposit mobilization.
325 I believe if our bank uses all the service quality dimensions, it can increases
customer attraction and deposit mobilization.
326 The amount of deposits mobilized as a result of application of service quality meets
the bank’s target.
327 Our bank do not facilitate & train to all concerned employees about the advantage
of service quality and closely follows its implementation.
328 In general, application of service quality increases deposit mobilization
performance of the bank.
II Section Two: Deposits (Dependent Variable)
329 Mobilizing substantial level of deposits is a pillar for our bank’s existence.
330 Our bank is highly benefited by mobilizing deposit and using it for loan
disbursement.
331 Deposit for the bank is fundamental to ensure high profitability through
deployment of credit as well as use for liquidity management.
332 Our bank needs substantial deposit mobilization to meet the current demand of
loan disbursement.
333 Deposit in general is crucial for our bank to increase revenue & for liquidity
management.
III Section One: Branch Expansion
334 Our bank recently works hard on branch expansion and it has contributed
significantly towards deposits mobilization.
335 Although branch expansion has good contribution to deposit mobilization, the
practice of new branches somewhat erode customer base as well as deposit
mobilization performance.
336 Branch expansion support existing branches resource mobilization effort through
facilitating high branch network that enable customers’ access their account from
elsewhere using the core banking technology.
337 Branch opening at rural areas benefit the bank in terms of increasing market share
as well as deposit mobilization.
338 In general, branch expansions greatly contribute the deposit mobilization
performance of our bank.
IV Section Two: Interest Rate
339 Provision of high interest rate on deposit might attract more deposits but not
advisable as it affect banks profitability.
340 In order to attract high deposits from customers the interest rate provided by our
bank should be comparable to inflation rate of the country.
341 Without provision of attractive deposits interest rate, only good customer service
attracts more customers & deposits.
342 Our bank has no alternative as well as attractive deposits interest rates when
compared with all commercial banks in Ethiopia.
343 Our bank can mobilize high deposit if it provides attractive interest rate.
344 In general interest rate on deposits plays significant role in encouraging savings of
disposable income in general and that of none affluent people income in particular.
105
III Section Three: Technology

345 AMOLE (Mobile and internet banking) is more convenient to customers bill
payments, purchase of commodities from supermarket, online book purchase,
online music purchase, money transfer service like (account to account, account to
wallet, wallet to account, and wallet to wallet)also useful for air time purchase etc.
This technology contributes to the banks customer attraction and deposit
mobilization performance.
346 Among the different technologies our bank is using, excellent core banking system
which enable the banks customers use their account either from any branch of
Adama city or outside Adama city supports to attract more customer and high
deposits.
347 Although our bank introduced latest Omni-channel (AMOLE) technology which
could attract new customer and retain the existing ones, the bank couldn’t make
use of its technology advantage due to inappropriate advertisement and weak
initiation of most of its staff.
348 Our bank is pioneer in introducing ATM and POS machines. It took the first mover
advantage in attracting more customers from the market also in mobilizing good
size of hard currency than other commercial banks.
349 Our bank didn’t get benefit of deposit mobilization from cross selling and up
selling of transactions by using its technology.
350 In general, application of appropriate technology contributes high to increase
market share in resource mobilization and for attraction of potential customers.
IV Section Four: Economic growth (Disposable Income)
351 Economic growth contributes to increase disposable income and which leads to the
banks high deposit mobilization.
352 The practical situation of savings in Adama city shows that savings from
disposable income of young, middle age and old people is almost similar.
353 Our bank use alternative strategies that can improve savings from disposable
income of young, middle age, and old people.
354 In general, economic growth of the country greatly support deposit performance of
our bank.
V Section Five: Market Study
355 Our bank meets its target of deposit performance by regularly conducting market
study on customers test and preferences.
356 Our bank sometimes creates new product/s, but do not communicate well to
customers and this resulted weak product sale.
357 The bank is not managing customer relationship management in a way that benefits
the bank.
358 Regular market study can positively contribute to the banks deposit performance.
359 In general, application of alternative market study could support the deposit
mobilization effort of our bank.
106

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‫دمسي درخ‬

A COMPARATIVE ANALYSIS ON CHALLENGES AND

Name: Dereje Demissie Shasho

E: Computer Related Skills and Knowledge

Language type Skills

[1]. HIV-1 Subtype C Syncytium- and Non-Syncytium-Inducing Phenotypes and Co-Receptor

1. Prof. Endashaw Bekele (PhD); AAU, Department of Biology, Tel.: +251947407077.

RESUMÉ, CV ............................................................................. Error! Bookmark not defined.

3: RESEARCH METHODOLOGY ..................................................................................... 31

5.2. Conclusions ................................................................................................................... 85

ABBREVIATIONS AND ACRONYMS

ADR Age Dependency Ratio

Adama city, 2020(94)

Key Words: Deposit, deposit mobilization, challenges, opportunities, comparative analysis,

1.1. Background of the study

Deposit mobilization is a fundamental part of banking activity. Mobilization of saving

However, customer’s dissatisfaction, inaccessibility of banks and their branches, absence of

Therefore, the importance of undertaking study to investigate deposit mobilization levels,

1.2. Statement of the problem

1.3. Major Research Questions

1.4. Objectives of the Study

1.4.2. Specific Objectives

1.5. Significance of the study

1.6. Scope of the study

1.7. Limitations of the Study

1.8. Study Area and Population

1.9. Operational Definitions of Key Terms

1.10. Organization of the Research work

2: REVIEW OF RELATED LITERATURE

2.1. Theoretical Review

Deposit mobilization is an integral part of banking activity. Mobilization of savings through

2.1.2 Major Types of Deposit products or Accounts

2.1.3. Overview of Challenges and Opportunities of Deposit Mobilization

Regardless of the classification schemes employed in categorizing determinants of deposit

With respect to classification of determinants of deposit mobilization into internal and

2.1.3.1 External and/or Country Specific Factors

2.1.3.2. Internal and/or Bank Specific Factors

2.2. Empirical Review of Relevant Literature

Mshauri (2012) analyzed factors determining deposit mobilization in commercial banks in

Joyce (2015) investigated the challenges of deposit mobilization at agricultural development

Ketema Getachew (2017) empirically examined the determinants of commercial banks

Begashaw D. Woldemichael (2010) performed an empirical study on the topic entitled

2.3. Knowledge Gaps

2.4. Conceptual Framework and Hyporesearch work of the study

According to Martin (2013), financial literacy can be viewed as an important potential

Independent Variable I: Independent Variable II

3.1. Research Methodology, Approach and Design

3.2. Types and Sources of Data

3.3. Population, Sampling Techniques and Sample Sizes

3.3.1. Study Population

3.3.2. Sampling Techniques

3.3.3. Sample Size Determination

1.962 * 0.5 * 0.5

7 Derartu Tullu Branch 1 0 2 1 3 1 0 1 1 3

3.4. Variables of the study

Semi-structured questionnaire consisting of seventy-five items was administered to branch

3.6. Validity and Reliability of the Research Instruments

3.7. Data Analysis Techniques