THESISSUBMITED TO SMU SCHOOL OF GRADUATE STUDIES INPARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION

Abstract

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.This paper examines the factors affectingdeposit mobilization of Dashen Bank specifically on branches of Addis Ababa. 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. Six key independent variables, namely: Service Quality, Branch Expansion, Interest Rate, Technology, Disposable Income, and Market Strategy are identified as factor of deposit mobilization for Dashen Bank. The selected branches of Addis Ababa are considered as representatives for Dashen bank deposit performance. Quantitative and qualitative research approach is adopted in this research. Most of the bank work teams do not have clear orientation or guideline when and to what extent to look for deposits, where those deposits are available, how to get those deposits, and how to make cross and /or up sale to attract all deposits. Hence, in this studymore emphasiswas given to bank specificvariables in orderto analyze their contributionto deposit mobilization by using the descriptive statistics, correlations and regression models. Different diagnostic like R-squared and adjusted R- squared valuesare tested and shown as the bank’s deposits performance moves in line with the independent variables. Also in ANOVA, the P value indicates P < 0.05 that is significance and the error is zero. Hence, there is a relationship between the dependent variable (deposit) and independent variables. Same is confirmed by Chi-square test.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. Finally, deposit mobilization is very crucial for banking business; Hence, Dashen bank should be vigilant in applying the aforementioned independent variables to attract and retain more deposits and deposit customers.