Assessment of Deposit mobilization in Ethiopian Commercial Banks.docVIP

Assessment of Deposit mobilization in Ethiopian Commercial Banks 　　【Abstract】Deposit mobilization is an integral part of banking activity. Mobilization of savings through intensive deposit collection has been regarded as the major task of banking in Ethiopia today. Acceptance of deposits is the primary function of commercial banks. As such, deposit mobilization is one of the basic innovations in current Ethiopian banking activity. 　　【Key words】Deposit mobilization;Commercial banks;Ethiopian banks 　　１．Introduction 　　Nations strive for the development of their economy and poverty reduction. Investment is the driving force to bring about fast and sustained economic growth. Resources to be employed in the facilitation of investment activities are acquired via the accumulation of wealth over a certain period of time in the form of savings. In this regard, banks play crucial intermediary roles in mobilizing financial resources from those who wish to save and provide loan to those who wish to invest. Having a well developed banking system with diversified products and services accessible to the public is believed to boost economic growth and reduce poverty. Of course, the relationship is reciprocal indicating high economic growth is necessary for a sustained development of the banking system itself. 　　1.1 Objective of the research 　　This study provides assessment of the potential for deposit mobilization in light of the enhanced roles of the Ethiopian banking industry in the Ethiopian economy. 　　1.2 Methodology 　　The methodology employed is both primary and secondary data available internally and externally. 　　2.Literature review 　　Savings is a foregone current consumption for future consumption that accounts for the residual between income and consumption. Beyond postponing consumption, holding resources under control and sustaining them for certain duration reflects the time aspect of saving (Schreiner, 2005). Savings is therefore, the movement of resources