Abstract

Lending is the primary role in commercial banks’ daily banking activities and is described as the heart of a commercial banks’ banking business. On the other hand, it is also one of the greatest sources of risk to the safety and soundness of financial institutions. There is little empirical evidence on bank lending behavior in emerging markets like Ethiopia. However, the existing studies have a difference in the identification of which factors have a strong impact and on the direction of those impacts if any on Ethiopian commercial banks’ lending. Thus, this study investigated the bank-specific, industry-specific and macroeconomic determinants of commercial banks’ lending in Ethiopia using balanced panel data of 15 commercial banks from 2011 to 2019. To realize the stated objective quantitative approach and explanatory design were employed using secondary data sources from the audited financial statement of sampled commercial banks. The model result of the study indicated that bank-specific factors such as; volumes of deposit, capital adequacy, and bank size have a positive and statistically significant effect on bank lending. Industry-specific factors such as; cash reserve requirement, bank concentration, and average lending rate have a negative and statistically significant effect on bank lending. Likewise, one of the macro-economic variables gross domestic products has a negative and statistically significant effect on bank lending. The study suggested that commercial banks in Ethiopia have to manage their lending by giving more attention to the internal factors, which the management has control over in line with the banking industry rules and regulations recalling the influence of the general economic dynamic. I believe that this study is of interest to bankers, analysts, regulators, policymakers, and investors since it provides useful insight on the determinants of commercial banks’ lending and an understanding of how bank intermediation roles may respond to internal as well as external rules, regulations, and general economic dynamics, and it will contribute to the scarce empirical evidence.

摘要

贷款是商业银行日常银行业务的主要角色，被描述为商业银行银行业务的核心。另一方面，它也是金融机构安全和稳健的最大风险来源之一。关于埃塞俄比亚等新兴市场银行借贷行为的实证证据很少。然而，现有研究在确定哪些因素对埃塞俄比亚商业银行的贷款产生强烈影响以及这些影响的方向（如果有的话）方面存在差异。因此，本研究使用 2011 年至 2019 年 15 家商业银行的平衡面板数据，调查了埃塞俄比亚商业银行贷款的银行特定、行业特定和宏观经济决定因素。为实现既定的客观量化方法和解释设计，采用了抽样商业银行经审计财务报表的二级数据来源。研究的模型结果表明银行特定的因素，如：存款量、资本充足率和银行规模对银行放贷具有积极且统计显着的影响。行业特定因素，例如；现金准备金要求、银行集中度和平均贷款利率对银行贷款具有显着的负向影响。同样，宏观经济变量之一的国内生产总值对银行贷款具有负面且统计上显着的影响。该研究表明，埃塞俄比亚的商业银行必须通过更多关注内部因素来管理其贷款，管理层根据银行业规则和法规对其进行控制，并回顾总体经济动态的影响。我相信这项研究对银行家、分析师、监管者、政策制定者和投资者很感兴趣，因为它提供了关于商业银行贷款决定因素的有用见解，并了解银行中介角色如何应对内部和外部规则，法规和一般经济动态，这将导致稀缺的经验证据。