The Impact of Branch Expansion Dimensions on Deposit Mobilization with Special Reference Dashen Bank S.C, Ethiopia

Abstract

Banks' primary focus is deposit mobilization, therefore achieving the optimal level of earning deposits is critical. The rationale of this paper is to study the effect of branch expansion dimensions (government policy, population growth, location of branch and branch office rent) on deposit mobilization in the context of Dashen bank S.c. The researcher followed descriptive and explanatory type of research design. Quantitative research approach was adopted for the study. The rationale of using such a quantitative approach is due to insufficient resources like period and cost, to obtain the reliability result of the collected data, reducing the bias of judgment, and ratifying the research. The study was limited to the Bank’s staffs in Bahir Dar district and the sample branches and head office organs was selected based on purposive sampling technique. Accordingly, primary data were collected through a survey using a structured questionnaire with a sample of 283 staffs who are serving the bank by assuming different positions.

Returned questionnaire was analyzed using descriptive, correlation and regression analysis with statistical package for social sciences (SPSS.20). The finding indicates that among the four independent variables government policy is the first most significant factor that is perceived to be important in deposit mobilization of dashen bank S.C. followed by population growth, location of branch and branch office rent takes the fourth place important factor of deposit mobilization. The relationship between those independent variables and dependent variable was significant. This means that the banks’ growth in deposit highly relates to branch expansion dimensions. The bank used in the study may limit the applicability of the findings to the whole bank industry in our country. Thus, the researcher suggests that further studies to examine more branches, districts and different banks in the industry not only in Bahir Dar district but also in other geographical areas throughout Ethiopia and in other service sectors to either prove or improve the findings of the study.

Keywords: Branch expansion dimensions, Deposit mobilization, Dashen Bank S.c