FACTORS AFFECTING DEPOSIT MOBILIZATION IN PRIVATE COMMERCIAL BANKS: THE CASE OF AWASH INTERNATIONAL BANK S.C.

Abstract

The main business for banks is accepting deposits and granting loans. The more the loans the banks disburse the more profit they make. Also, banks do not have a lot of their own money to give as loans. They depend on customer deposits to generate funds for granting loans to other customer this process is known as deposit mobilization. The aim of this paper is to examine and assess deposit mobilization of private commercial banks. Those having two years and above experience senior Addis Ababa area branches and head office employee were selected for data collection. The research has used questionnaire and structured interview discussion for employees and the management of Awash International Bank Share Company. The result shows that the reconstruction of Addis Ababa roads, Aggressive branch expansion of CBE, the current condominium house construction program, peoples attitude towards using private banks and poor parking area are strongly influence the deposit mobilization process of Awash International Bank S.C. Opening of additional branches, aggressive promotion and upgrading service deliverance can boost the deposit balance of a bank positively. The study suggest the management of the bank should arrange and apply incentive program such as coupon prizes to attract more depositors, open additional branches near to the customers, promote excellent services and other mores are discussed in the research.