DEPARTMENT OF ACCOUNTING

ASSESSMENT OF SAVING MOBILIZATION IN COMMERCIAL BANK OF

ETHIOPIA (CASE STUDY GONDAR ZOBIL BRANCH)

A RESEARCH PROPOSAL SUBMITTED TO THE DEPARTMENT OF

ACCOUNTING IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR
BA DEGREE IN ACCOUNTING
Abstracts
This study will aim at assessing the saving mobilization on Commercial bank of Ethiopia
Gondar-Zobil Branch. The study will try to assess the factor that affect strength and weakness
with regard to saving mobilization on commercial bank in case of Gondar-Zobil branch.
Regarding to this research the census method will be used. The research design will be
descriptive and the data collection method will be primary and secondary data sources.
Interview and quaternaries will be the primary sources of data and documentary review, books,
internet and Bank manuals will be used (secondary data). The target population of the study
will be all employees in the bank including the casher, accountant and the manager of the
bank. The gathered data will be analyzed and interpreted by using qualitative approach of data
analysis.
 TABLE OF CONTENT

Abstracts....................................................................................................................................ii
CHAPTER ONE............................................................................................................................1

INTRODUCTION.........................................................................................................................1

1.1. Background of the study.....................................................................................................1

1.2. Background of the Organization.........................................................................................2

1.3. Statement of the Problem....................................................................................................2

1.4. Objectives of the study.......................................................................................................4

1.4.1. General Objective...........................................................................................................4

1.4.2. Specific Objectives.........................................................................................................4

1.5. Research Question..............................................................................................................4

1.6. Significance of the Study....................................................................................................4

1.7. Scope of the Study..............................................................................................................5

1.8. Organization of the Study...................................................................................................5

LITERATURE REVIEW..............................................................................................................6

2.1. Theories of literature review...............................................................................................6

2.2. Commercial bank of Ethiopia Saving Mobilization...........................................................7

2.3. Importance of Saving Mobilization of Commercial Bank of Ethiopia...............................7

2.3.1. Saving mobilization as a Source of Fund for Loan.........................................................7

2.3.2. Attracting Saving Mobilization is Cheaper than Raising Equity....................................8

2.3.3. Fund Investment and Projects.........................................................................................8

2.4. Exogenous Problems..........................................................................................................8

2.4.1. Country’s specific factors...............................................................................................8

2.4.2. Saving Interest Rate........................................................................................................9

2.4.3. Inflation...........................................................................................................................9
2.4.4. Real Interest Rate............................................................................................................9

2.4.5. Economic Growth...........................................................................................................9

2.4.6. Consumer Price Index...................................................................................................10

2.5. Bank Specific Problems....................................................................................................10

2.5.1. Liquidity of the Banks...................................................................................................10

2.5.2. Profitability of the Bank................................................................................................10

2.5.3. Security of the Banks....................................................................................................11

2.5.4. Branches........................................................................................................................11

2.5.5. Reserves........................................................................................................................11

2.6. Endogenous Problems......................................................................................................12

2.6.1. Awareness of the Society..............................................................................................12

2.6.2. Convenience of Banks Office.......................................................................................12

2.6.3. Services in the Bank......................................................................................................12

2.7. Empirical Study................................................................................................................13

CHAPTER THREE.....................................................................................................................16

RESEARCH METHODOLOGY................................................................................................16

3.1. Research Design...............................................................................................................16

3.2. Research approach............................................................................................................16

3.3. Source and methods of Data Collection...........................................................................16

3.4. Population of the Study....................................................................................................16

3.5. Sampling Technique and Sample Size.............................................................................17

3.6. Data Analysis and Interpretation......................................................................................17

CHAPTER FOUR.......................................................................................................................18

WORK PLAN..............................................................................................................................18

4.1. Time Schedule..................................................................................................................18

4.2. Financial Budget...............................................................................................................19

REFERENCES............................................................................................................................20
 CHAPTER ONE

INTRODUCTION

1.1. Background of the study

Banks are the most important financial intermediaries that play an important role between
depositors and borrowers as well as to mobilize fund and pass them over or lend to those which
need to finance business or projects. In other word banks act as a bridge between societies by
transferring fund from savers that were in need of fund to invest. Because of their intermediary
function bank also serve as vehicle for economic and social development of country (Kiyota,
2007).

Saving is an act of giving money or securing in to a bank and to others who promises to
preserve it or to use it and return it in kind, especially the act of placing money in a bank safety
and convenience and saving is an excellent place to build up an emergency cash fund .the
emergency fund can be your life line when you are facing with unemployment or un foreseen
expense. Saving are accounts maintained by retail financial institutions that pay interest but
cannot be used directly as money in the narrow sense of medium of exchange. Those accounts
let customers set aside a portion of their liquid assets while earning a monetary return. Saving
provide the economic security of safety net. By transferring resources from the present to the
future via saving, individuals are prepared to face an expected and irregular financial
circumstance. Besides, it leads to accumulation of wealth that enables individuals to improve
their living standards and to respond to new opportunities. Most people as form of savings
maintain these accounts so as to earn interest from the banks (Rasial, 2010).

Saving is an act of depositing of money in to the bank. Saving are not only held to meet the
needs of the present or the near future but also kept individuals as part of their total stock of
wealth. One of the problems, in the mobilization of saving is that, banking activity in
developing countries is limited to the officially existed marketing activity. In addition, the
peoples in the countries have not found well familiar with all banking activities plus when it
comes to savings, people in general and the poor in particular might not be completely rational
and completely knowledgeable. For this matter financial education to undeveloped society
enables those to improve their financial knowledge of savings know from their daily income
from future consumption (Sergeant, 2001). Maximization of saving customer through intensive
collection has been regarded as a major task of banking Acceptance of saving is the primary
function of commercial bank of Ethiopia Gondar Zoble branch. Maximization of savings of
customer can be meet by using high technologies, training has given to saving promoting staff,
developing high organizational trust, giving client full pledged facilitate at new (Rose, 2005).

1.2. Background of the Organization

The Commercial Bank of Ethiopia Zobil branch was established in May 2014 with on the
objectives the customer satisfaction on commercial and loan activity to different customers on
the city of Gondar. The bank was establish on the initial capital of birr 2500,000 and grow
through process rapidly in the following period by efficient activity on commercial activity and
customer participation. The bank was established to perform the major banking functions
including accepting saving demand and the deposits providing short, medium and long term
loan and also buying and selling foreign exchanges and engaging in other banking activities
customarily carried out by commercial bank.

1.3. Statement of the Problem

Saving mobilization is fundamental part of banking activity. Mobilization of saving through

intensive deposit collection has been regarded as the major tasks of banks. According to Banson
(2012), “mobilization of saving for a bank is as essential as oxygen for human being”, saving
mobilization is one of the main function of banking business and so an important source of
working fund for the bank. Saving mobilization is the collection of cash or funds by a financial
institution from the public through its current savings, fixed recurring accounts and other banks
specialized schemes. Selvaraj Kumar, (2015) states that, the success of the banking greatly lies
on the saving mobilization. Performance of the bank depends on saving, as it is normally
consider as a cost effective source of working fund. Saving helps to expand banking operation.
Generally saving mobilization for a bank is as essential as oxygen for human being. However,
the commercial bank of Ethiopia faced by interrelate problems toward of the saving
mobilization.
According to Shemsu (2015), Mobilization of saving is one of the important functions of
banking business it is an important source of working fund for the bank. Saving Mobilization is
an indispensable factor to increase the sources of the banks to serve effectively. Saving is one
of the resources of banks highly motivated to mobilize and the most liquid Money that is found
in the treasury of the bank and which is ready to be borrowed in need of fund. Commercial
Banks should mobilize enough saving to disburse the loan request of the Customer Deposit
mobilization is an integral part of banking activity.

According to NBE (2016), In Ethiopia, while saving has been growing rapidly, further
Mobilization is needed to satisfy the significant demand for financing. Policies that promote the
expansion of bank branches, increase financial awareness, and diversify savings instruments
will help boost savings. To promote savings, banks were being encouraged to expand their
branch network and to develop better-targeted savings instruments (For example for home
buyers and Ethiopia's Diaspora) the NBE agreed with staff that higher interest rates (Especially
for term deposit) could also promote savings, though they saw greater impact from structural
policies.

The importance of savings in the development experience of Asian Countries may be relevant
in this regard. (NBE, 2016).Despite many researches were conducted in Ethiopia in the area
such as, Sissy (2013),Jember (2014), Hebert (2015), and Kibebe (2016), this studies reviewed
were focusing on the function of saving mobilization in commercial banks in Ethiopia. This
research will be concerned on the factors that affect saving mobilization in commercial bank of
Ethiopia in Gondar-Zobile branch.

As per the researcher's knowledge, so far there was no research, which is conducted in Gondar
town particularly in commercial bank of Ethiopia, Gondar branch on the same topic, and also
the researcher can't find any research conducted on the same topic. Therefore, this area gap is
the reason that initiates the researcher to conduct his study on this topic in Commercial bank of
Ethiopia in Gondar branch. Accordingly, this study will try to identify the factors that affect
saving mobilization in commercial bank of Ethiopia Gondar branch by assessment of saving
mobilization.
1.4. Objectives of the study

1.4.1. General Objective

The general objective of the study will be to assess the saving mobilization in Commercial bank
of Ethiopia in Gondar Zoble branch.

1.4.2. Specific Objectives

1. To identify the internal problems that challenge mobilization of saving in commercial
bank of Ethiopia in Gondar Zoble branch.
2. To evaluate the external problems that challenge mobilization of saving in commercial
bank of Ethiopia in Gondar Zoble branch.
3. To show the right method to be used by commercial bank of Ethiopia in the
mobilization of saving Gondar Zoble branch.

1.5. Research Question

1. What are the internal and external problems that challenge mobilization of saving in
commercial bank of Ethiopia in Gondar branch?
2. What types of activity the bank use or follow to increase the number of the customers
of saving and amount of their savings?
3. What are the right methods to be used by commercial bank of Ethiopia in saving
mobilization?

1.6. Significance of the Study

The study will be help to identify the problems that challenge saving mobilization, help banks
to design and implement effective deposit mobilization strategies, reference for the future
researchers and initiates them to perform with deep knowledge in the practice of saving
mobilization and also help to improve the saving mobilization policy and practice to increase
saving mobilization activities by alleviation of existing problems. It will also help managers to
identify the cause of the problems and redirects their policies based on the finding of this study
in order to maintain effective saving mobilization practices. This study comes up with relevant
information to improve its performance regarding saving mobilization. In addition this research
will help to determine activities that initiates customers to save. Finally this research will be
used as reference for other researcher who wishes to study similar issues.

1.7. Scope of the Study

The scope of this study will be limit to deal with the assessment of saving mobilization in
commercial bank of Ethiopia in Gondar-Zobil branch. It focuses on internal and external
problems that challenges saving mobilization.

1.8. Organization of the Study

The study will be organized in five chapters. The first chapter deals with introduction of the
study which consists of background of the study, statement of the problem, objectives of the
study, significance of the study, scope of the study, limitation of the study and organization of
the study. The second chapter is deals about review related literature, the third chapter deals
with data design and methodology of the study, and also the fourth chapter is deals with data
presentation and analysis, the fifth chapter is deals with conclusion and recommendation And
also the source that include in all chapter especially in chapter two.
 CHAPTER TWO

LITERATURE REVIEW

2.1. Theories of literature review

Saving Mobilization is designed to attract funds from customer who wish to set their money
anticipation of future expenditures or financial emergencies. These Mobilizations generally pay
significant higher interest rates. While their interest cost is higher in saving or thrift
mobilization are generally less costly for a bank to process and to manage just as bank for
decades offered only one basic transaction mobilization of the regular checking account, so it
was saving Plan. Book Savings is sold to house hold customer in small denominations and with
drawl privilege were unlimited. Few banks have insisted on this technique because of the low
interest rate paid on these account and because pass book savings tend to be stable any way
with little sensitivity to change in interest rates. Saving mobilization, these are mobilization
which the Bank Pays small interests to the customers who are usually small savers (Phil, 2010).

Customers can withdrawal any amount standing in their credit by checks without notice. The
bank pays another rate of interest on such saving the interest rate interest rate increase with the
length of period of saving mobilization. Early withdrawal all (before the maturity date) are
made up giving advance notice.

Advance Loan: -bank lend certain amount of money to customers as per their request and
charging higher interest rate than it pay for saving mobilization on such mobilization they have
given loan in the following ways. Cash credits bank advance to business man against certain
specified securities. The borrower can withdraw money through checks according to his
requirement; but pays interest along with principle amount at regular interval.
Cash loan: - these are very shorter loans advance to the bull blacker for hot more than fifteen
days; such bills can be recalled at very short notice.
Overdrafts: - a bank often allows business man to draw checks for a sum greater than the
balance lying in their account. The business man is charged interest on the amount by which his
current accounts or over drawn. Discounting bill of exchange if creditor holding a bill of
exchange wants money immediately, the bank provides him the money by discounting the bill
of exchange
Financing foreign trade: -commercial bank of Ethiopia finances foreign trade of its customers
by accepting foreign bill of exchange and collecting them from foreign bank. It also buys and
sells foreign currencies. (Dori, 2015)
Agency services: - bank acts as an agent of its customers in collecting and paying checks; bills
of exchange.
Miscellaneous: - besides; the above noted service the commercial bank of Ethiopia act as,
custodian of valuables of its customer by providing them locker where they can keep their
Jewells and valuable documents. (Dori, 2015)

2.2. Commercial bank of Ethiopia Saving Mobilization

Commercial bank of Ethiopia saving mobilization is major liabilities for commercial banks.
Kelvin (2001) said that savings of private banks account for about 75% of commercial banks
liabilities.

Due to the fact that commercial banks are using this liability to lend and gains return on it, and
their saving are using for third person’s business. Therefore, bank should mobilizing more
saving provide limits to the working capital of the bank concerned. If bank has accepting more
saving from customer and can able to lend and through this it can earn more profit. The higher
the saving the higher will be funds at the disposal of bank to lend and earn profits (Desingea,
1975) therefore maximize its profits the bank should increase its saving.

Commercial banking is a service industry with a high rate of built in profit potential (menaces,
1975). The number one expense item for a bank is interest commercial banks mainly depend on
the funds saving with them by the public to lend it to other in order to earn interest income
(Drainage 2010).

2.3. Importance of Saving Mobilization of Commercial Bank of Ethiopia

2.3.1. Saving mobilization as a Source of Fund for Loan

Herald (2009) states saving mobilization are one of main source of banks to provide loan. Thus
saving mobilization is mainly provided by people as Mohammad and Mahadi (2001) however
saving can also be provided by business organization NGo government and so on. Therefore,
whether saving are from individuals business and government they are important financial
source of funds,

2.3.2. Attracting Saving Mobilization is Cheaper than Raising Equity

Banks as any other business organization mobilize funds from debt or equity. In the banks
context raising equity is more expensive or costly than attracting saving Lorenzetti (2010) states
that, if the leading channel plays role, the saving growth should lead to an increase in the supply
of loans due to the additional source of financing for banks. As demand for loan increases
because of the development work done by individual, business and government banks creates a
saving by lending to a business man, it is clearly performing function for which its untitled to
are turn in the form of interest payment ( Harold 1946).

2.3.3. Fund Investment and Projects

Debt is largely held by domestic commercial bank of Ethiopia which are funded mainly from
saving of government, demand for bank assets enabled banks to continue to expand their saving
base rapidly and profitable (herald, 2009) individual investor and government are mainly
depending on the saving of banks to fund their investment and development. Generally, the
banking system can be viable only it can mobilize saving at the required rate and this can be
done only by making a bank saving more attractive (V.V hat 1970).

2.4. Exogenous Problems

These are factors, that are from country and banks that can affect the growth of commercial
bank of Ethiopia, saving mobilization there discussed as follow.

2.4.1. Country’s specific factors

The country economic social and political factors can affect the commercial banks, according to
herald, (2009) country specific risks such as political and financial (risk) may affect the
propensity for saving to place funds in the banking system. A bank success in their operation is
mainly depends on the environment where the business in undertaken.
2.4.2. Saving Interest Rate
One of the most effective factor for deciding to save in the banking system is the interest rate
(Mohammed. 2005and Mahadi, 2010), interest rate in the bank system it held at investment cost
form the investor point of view and opportunity cost from the customer point of view.Wegagen
banks mobilization saving are interest rate sensitive, therefore as the interest rate change the
saving mobilization commercial banks will change.

2.4.3. Inflation
Is seen as an economic problem in developed countries in the second half of 20 th century?
inflation with effect economic growth employment, income distribution , wealth as well as
social and political conditions of a country can influence its entire dignity (Mohammed and
malady, 2010) with respects to the effect of inflation on saving, it can be mentioned that in
general all individuals who save a part of their income in banks diversely damaged by the
inflation and their assets decrease in proportion with money valve decrease (Mohamed and
mashed; 2010) in the cause as Mohammed and malady (2010) describes people try to change
their cash and savings to more reliable and stable forms such as land jewelry, antiques art
collection saving mobilization.

2.4.4. Real Interest Rate

Real interest rate is nominal interest rate minus inflation rate. Mohammed and Mahadi (2010)
said that in negative real interest rate condition, people withdraw their resource from banking
system. According to Mohamed and Mahadi (2010 some research supposed that decrease in the
real interest rate could decrease true demand for many (in its) extensive definition including
saving mobilization therefore, it states that the interest rate and saving of the bank have positive
relationships.

2.4.5. Economic Growth

economic performance it generally being measuring gross domestic product (GDP), available
that has also become the universal metric for standards of living (Yonne , 2007) according to
herald, 2009, growth is one of the determining factors for waggle banks, saving mobilization .
GDP is calculated by adding up the value added at stage of production (dedicating the cost of
produced input and materials purchased from an industry is supplies (Jim, 2008).

2.4.6. Consumer Price Index

According to herald, (2009), price can also determine commercial bank of Ethiopia saving
mobilization and it can be indicated by consumer price index. In literature there is evidence for
the influent of consumer price index on commercial banks saving mobilization, however this
area was rarely studies.

2.5. Bank Specific Problems

2.5.1. Liquidity of the Banks

The concept of liquidity in finance principally lies in two areas (Ismail, 2010):-

A. liquidity of financial instruments in the financial market

B. the liquidity to solvency

The former relate to liquidity of financial market and financial instruments, smooth transactions
and no barriers. As to Ismail, (2010), the later discuss the obligation of banks, to make
payments to third parties (filder, 2000:442)

An important measure of liquidity is loan to saving ratio. the loan, to saving ratio is inversely
related to liquidity and conserve the higher the loans to saving ratio the lower the liquidity and
vice versa (diving, 2010). Key liquidity indicator such a share of monetary aggregates loans to
saving ratios are important for market operation and management (shekess, 2005) the banks
liquidity management involves acquiring sufficient liquid asset to meet the bank obligation to
customer (von-choosing etal,2010). according to the findings of Doro, 2009) it is more
profitable for savings banks to hold liquid asset than to investment in liquid assets such as
medium – term interest bank lending to other credit institutions .
2.5.2. Profitability of the Bank
Even and Ekki (2004) find the long run relationship between commercial bank of Ethiopia
saving mobilizing and the profitability of the banks. higher bank profits would tend to signed
inversed bank soundness, which could make it easier for these banks to attract saving
mobilization (herald and hero, 2009) however, the effect of bank profitability and bank size is
found to be insignificant once controlling for the other valuables so, the effect of profitability
and bank size are found to be insignificant once controlling for the other variables.

2.5.3. Security of the Banks

Security of banks matters in mobilization saving riskier banks would be able to attract saving
only paying higher interest rates. The security of bank has its own important on its
attractiveness for customers. For example in the existence of saving insurance the savers no
longer are concerned about the soundness of their banks because their saving are ensured in the
event of bank failure. The bank should securities system so as to mobilize more saving than
before and to attract new saving and maintain the existing several.

2.5.4. Branches
There is relationship between commercial bank of Ethiopia, saving and mobilization banks
branches expansion hot only are saving influenced by bank branches. But the expansion bank
branches are also influenced by the level of saving mobilization in any area. (M.A
Baquietal,1987) it is expected that banks make decision on expanding their facilities by
considering factor such as level of competition, saving potential regional income and existence
of road and vehicles.

2.5.5. Reserves
Richards (1959) Said, that reserves that are fixed legally influence the saving that banks can
hold it. According to them reserve requirement determine the maximum amount of loans and
investment that each commercial bank of Ethiopia and banking system as whole may maintain
in relation to saving. Thus it the reserve requirements are 20 percent saving loans and
investment may not exceed 80 percent of saving. there for reserve requirement, limit the total
expansion of bank saving that can occur on the basis of any primary decreases in saving
reserve requirements also have the effect of limiting the reduction in bank credit and saving that
is forced upon the banking system by primary decrease in saving the commercial bank of
Ethiopia can obtain currently to payout to customer only by drawing down their money
( Richard, 1959).till money according to Richard good and thome (1959) is the currency that
banks keep on hand satisfying day to day needs. They pointed out that bank saving are large
part of the money supply in virtually all countries.

2.6. Endogenous Problems

In the literature of endogenous factors are identified that can be affect the growth of
commercial bank of Ethiopia saving mobilization. They are awareness of the society for using
banks to saving their money, convenience of the banks office and service in the banks and the
system itself.

2.6.1. Awareness of the Society

According to Baquietal (1987) some analysts argue are determinate for saving of banking
system of the study conducted by taking rural area as its base it is obvious that in consider the
awareness as a factor of saving mobilization. It was also found that literacy as proxy for
awareness about banking, positively influence saving mobilization.

2.6.2. Convenience of Banks Office

Road and vehicles directly influence interest bearing rat be airing saving because of the
reduction in customer transaction costs through reduced time spent in travelling to and from
bank (M.A Baquietal 1987) banks can mobilize more saving when they make their service close
to their customer.

2.6.3. Services in the Bank

Service in the bank should be attractive enough for the customer so as to mobilization saving. It
banks could offer this services, the savers would be inclined to keep a part of their savings in
the form of saving (V.V batt, 1970) names to use to mobilize of saving.
1. Door to door collection of small saves in the form of recurring saving
2. Offering land revenue or insurance premium
3. An investment service
4. Some person like farmers get, their income says once a year, while their expenditure is
spread over the whole year.If bank could collect saving from them at the harvesting seasons,
and assures them regular withdrawals during the year, farmers may be incurred to keep
saving with the bank.

2.7. Empirical Study

This section provides the relevant empirical review related to the study of saving mobilization
in commercial bank of Ethiopia. According to (Gockel, Brow 2007), saving bank is money
placed in to a banking institution for safe keeping. Saving bank are made to saving account at a
banking institution. Such as saving accounts, checking accounts and money market accounts.
The account holder has the right to withdraw is saving funds, as set forth in the terms and
condition of account.
According to (Kazi ,2012), in banking sectors, saving mobilization is a scheme intended to
encourage customers to save more cash with the bank and this money in turn will be used by
the bank to disburse more loans and generate additional revenue for them. The main business
for banks is accepting deposits and granting loans. The more the loans the banks disburse the
more profit they make. According to (Katang, Ntui, 2008), in the most basic terms, united
banks take deposits from individuals and institutional customers, which they use to extend
credit to other customers.
According to (Abay, 2010), by sub-Saharan African standards, Ethiopia’s rate of domestic
saving has been very low. From 1997-2010, the average saving rate in low income countries of
the region was about 9 %, while it was about19% for middle income countries. In the same
period, the average saving rate of fragile sub-Saharan African states was 11.5%, still
significantly higher than Ethiopian’s rate of 4%percent.
According to (Even, Ekk2004), on saving determinates of commercial bank of Ethiopia in
Malaysia, investigate the structural determinates of saving level of commercial bank of Ethiopia
in Malaysia, using co- integration techniques. This study classified the variables for saving
mobilization into two, namely financial and economic variables. Financial variables consist of
interest rate on saving account and fixed deposit account, rate of profit for Islamic saving
account and Islamic investment account and fixed deposit account are normally known as
investment account at Islamic bank. Whereas, based leading rate (BLR), consumer price index
rate (CPI), money supply (MS), and gross domestic product (GDP) are Economic variables.
The data for this study are taken from the monthly statistical bulletin of banks (Negara,
Malaysia, Even, Ekk, 2004.Kibebe (2016), the objective of the study is to assess determinants
of saving mobilization in Ethiopian private commercial banks and the study adopt mixed
approach to gather the data.

The primary data is gathered using questionnaire. Sampling method of the primary data is
Purposive sampling technique while the secondary sources of data were extracted from Annual
reports of all private commercial banks of Ethiopia, data from National Bank of Ethiopia (NBE)
and from Central Statistical Authority (CSA) regarding the secondary data, The study used time
series data from 2000-2014 for analysis made using Classical linear Regression method the
study shows that, Age dependency ratio, Investment and money Supply, are the most
significant factors of saving mobilization activity. The other variable Such as Per capita income
has insignificant power to influence the dependent variable. As a Result, the study
recommended that, Government should increase investment so as to promote Economic growth
to mobilize deposits since exist a positive. .relationship between saving and Investment and
private banks ought to increase number of branches to mobilize more resource.

The study conducted by Sissy (2013), examines and assesses factors affecting saving
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, people’s attitude towards using private Banks and
poor parking area are strongly influence the saving 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 suggested 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.

2.8. Summary of knowledge Gap

The importance of savings in the development experience of Asian Countries may be relevant
in this regard. (NBE, 2016).Despite many researches were conducted in Ethiopia in the area
such as, Sissy (2013),Jember (2014), Hebert (2015), and Kibebe (2016), this studies reviewed
were focusing on the function of saving mobilization in commercial banks in Ethiopia. This
research will be concerned on the factors that affect saving mobilization in commercial bank of
Ethiopia in Gondar-Zobile branch.

As per the researcher's knowledge, so far there was no research which is conducted in Gondar
town particularly in commercial bank of Ethiopia, Gondar branch on the same topic and also
the researcher can't find any research conducted on the same topic. So this area gap is the
reason that initiates the researcher to conduct his study on this topic in Commercial bank of
Ethiopia in Gondar branch. Accordingly, this study will try to identify the factors that affect
saving mobilization in commercial bank of Ethiopia Gondar branch by assessment of saving
mobilization.
 CHAPTER THREE

RESEARCH METHODOLOGY

3.1. Research Design

For the purpose of this study the researchers will use descriptive type of research design.
Descriptive research proposal refers to set methods and procedures that describe research
variables in which the research method in order to answer who, what, when and how. Masoni,
(1991) because the major purpose of descriptive research is description of the state of affairs as
it exists at present. Then the study will be describing and critically to assesses the problem that
challenges saving mobilization of commercial bank of Ethiopia in Gondar branch.

3.2. Research approach

This study described the assessment of saving mobilization. In this study quantitative and
qualitative approach of doing research will be employed, in order to express the respondent
opinion and perception in terms of percentage.

3.3. Source and methods of Data Collection

The source of data for the study will be used primary source of data and secondary source of
data. Primary source of data will be collect from managers, employees and secondary source of
data will be collect from documents of commercial bank of Ethiopia in Gondar branch. As well
as from questionnaire close ended.

3.4. Population of the Study

As the researchers will have obtained the commercial bank of Ethiopia Gondar branch has 23
workers which are considered the target population of the research.
 3.5. Sampling Technique and Sample Size
The total target population of Gondar Zobil branch in commercial bank of Ethiopia are23 (10
female and 13 male) employees. These are managers, accountants and cashers. From those
target populations the researchers select all respondents in the sample size by using Census
Survey because the number of population is less.
The reason behind using this technique is: to get relevant and sufficient information, to get
more information and minimize risk. It enables the researchers to freely select the respondents
who fit for this question.

3.6. Data Analysis and Interpretation

In the study process different types of raw data will collect. This raw data will process and
analyze. The collect data will edit, classify and error will omit if there, examine and collect. As
the study uses a descriptive analysis method, the data collects organized, Analyzed and
interpreted using descriptive statistical tools such as frequency, percentages, mean, median
range and average as per the convenience to the types of data to use for best interpretation and
easy Understanding.
 CHAPTER FOUR

WORK PLAN

4.1. Time Schedule

No Activity Nov. Dec. Jan. Feb. Mar. April May June

1 Topic Selection X
2 Preparation of proposal X x
3 Collection of useful x
material
4 Data Collection x x
5 Data Analysis and writing x x X
of final research
6 Submission of research x
7 Presentation of final X
research

4.2. Financial Budget

 Item Quantity Per unit Total Cost
(Birr) (Birr)
Equipment
Paper 4 165.00 660.00
Pens 6 10.00 60.00
Pencil 5 4.00 20.00
Binder 1 60.00 60.00
Total Cost - - 800.00
Personal cost and stationary

Transportation 15 trips 150.00 300.00

Internet 400 hrs. 0.25 100.00
Typist 1 200.00 200.00
Total cost - - 550.00
Contingency - - 450.00
Overall total cost - - 1358.00

REFERENCES
Abay.R. (2010), rate of domestic saving
Banson& SakoeJ (2012), the role of mobilize in saving mobilization in GUANA. Asian Journal
Of business& mgmt. sciences; 1 -18

Dori.S. (2015), financing of foreign trade.

Erna. R &Ekk S. (2004) Problems affecting modern saving in Indonesian.

Even &Ekk (2004), the relationship between saving mobilization and profitability

Hebert (2015) Determinant and factors affecting saving mobilization in commercial

banks in Ethiopia
Herald (2001), saving mobilizations are source of banks to providing loan.

Herald (2009) about economic growth and challenges to saving mobilization

Ismail (2010), the concept of liquidity in finance

Jember (2014), Determinant and factors affecting saving mobilization in commercial

in Ethiopia
Kazi M. (2012), Promoting saving mobilization and financial inclusion

Kibebe (2016), Determinant and factors affecting saving mobilization in commercial banks in
Ethiopia

Laura. A & Sylvia (2009) CGAP Working on Saving Mobilization Comparative Analysis of
saving mobilization strategies.

Lorenz. (2010), attracting saving mobilization is cheaper than raising equity.

Mohammed. (2005) & Mahada (2010), about saving interest rate and inflation

Mohammed& Mahadia (2010), about real interest rate

Mohammed & Maldi (2001), saving provided by business organization, NGO and government

NBE, (2016) the importance of savings in the development experience of Asian

Phil .B.2010), definition of saving mobilization

Rose. (2005), Maximization of saving customers

Samuel (2015), Customer saving mobilization.

Sergeant (2001), Awareness creation of saving mobilization to the society.

Selvaraj & kumar. (2015), The success of banking greatly lies on saving mobilization.

Sissy. (2013), Determinant and factors affecting saving mobilization in commercial banks in
Ethiopia.