Determinants of commercial bank loan and advance disbursement: the case of private Ethiopian commercial banks

Birhanu, Tekeste; Deressa, Sewunet Bosho; Azadi, Hossein; Viira, Ants‐Hannes; Passel, Steven Van; Witlox, Frank

doi:10.1108/ijbm-05-2021-0166

Cited by 5 publications

(3 citation statements)

References 45 publications

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“…Besides, studied commercial banks are operating in a poor competitive environment (Eshete et al. , 2013; Boru, 2014; Desta, 2016; Tewodros and Gedion, 2019; Birhanu et al. , 2021), which diminishes a bank manager's endeavor to maximize their bank's productivity (Phan et al.…”

Section: Resultsmentioning

confidence: 99%

“…Mester (1996) also stated that the cost incurred to establish the customer relationship reduces the productive efficiency level of DMUs. Besides, studied commercial (Eshete et al, 2013;Boru, 2014;Desta, 2016;Tewodros and Gedion, 2019;Birhanu et al, 2021), which diminishes a bank manager's endeavor to maximize their bank's productivity (Phan et al, 2016).…”

Section: Regressions Analysismentioning

confidence: 99%

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Resource-based productivity in the closed banking sector: the case of Ethiopian banks

Tarekegn

Liu²,

Xiao³

2022

IJPPM

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PurposeThe current paper's goal is to examine the productivity of the closed banking sector evidenced from Ethiopia. In addition, the inclusion of intangibles on productivity was examined in the current paper.Design/methodology/approachFirst, the standard Malmquist Productivity Index (MPI) was employed for 13 commercial banks for both stages. Second, by excluding the state-owned commercial bank, the analysis employed a bootstrapped MPI for the robust and comprehensive conclusion. Furthermore, from 2010 to 2019, the fixed effect Ordinary Least Square (OLS) regression with balanced panel data was used.FindingsThe standard MPI in both stages shows that the productivity of Ethiopian commercial banks is declining. The technological shock was the main reason for the loss. The catch-up in both stages scored above unity, mainly due to the pure efficiency change. Besides, when combined with tangible resources, the inclusion of resource-based view (RBV) proxy variables reduces technological shock regress and ultimately improves productivity change. The bootstrapped MPI also reveals that technological shock is the primary source of the productivity decline. However, efficiency change also contributes to the productivity decline based on this estimation.Research limitations/implicationsFuture research could examine the more extensive productivity analysis by considering the primary sources of data collections for resource-based variables.Practical implicationsAccording to the study's results, banking regulatory authorities and bank management, including the shareholders, should continue to invest in cutting-edge technology to improve the productivity of the banking sector.Originality/valueThis is the first comprehensive study of productivity for Ethiopian commercial banks based on the standard MPI, bootstrapped MPI, and OLS by incorporating all resources into the analysis.

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Section: Resultsmentioning

confidence: 99%

Section: Regressions Analysismentioning

confidence: 99%

Resource-based productivity in the closed banking sector: the case of Ethiopian banks

Tarekegn

Liu²,

Xiao³

2022

IJPPM

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“…The rate at which loans are created in an economy has a big impact on how productively a nation operates. Commercial banks' primary sources of revenue are advances and loan interest (Birhanu et al, 2021). Credit requirements for borrowers are a direct cause of banks' financial issues.…”

Section: Literature Reviewmentioning

confidence: 99%

The Effect of Credit Risk and Board Diversity on the Performance of Banks Listed on the Indonesian Stock Exchange

Suhardono,

Simamora,

Agung

et al. 2024

IJIBE

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This research aims to analyze the influence of several factors on banking performance in Indonesia, with a focus on Return on Assets (ROA). The factors studied include the Capital Adequacy Ratio (CAR), Non-Performing Loans (NPL) ratio, Expected Credit Loss Provision (CKPN) ratio, Earning Ability (BOPO), Loan to Deposit Ratio (LDR), and Board Diversity (BD). Data was taken from banking companies listed on the Indonesia Stock Exchange in the period 2018 to 2022. The analysis method uses a linear regression test with a Fixed Effect Model. The research results show that the NPL ratio, CKPN ratio, BOPO, LDR, and BD have a significant influence on banking performance, while CAR does not have a significant influence. These results provide important information for investors and managers in managing banks, as well as being the basis for further research in identifying other factors that influence banking performance in Indonesia.�

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The impact of COVID-19 on the banking sector’s efficiency and growth trajectory

Jaiyeoba,

Oladokun,

Haron

et al. 2023

J Financ Serv Mark

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The COVID-19 pandemic has had an unimaginable effect on global economies and threatens the efficiency and growth trajectory of the banking sector. The pandemic has disrupted the primary operations of the banking sector, as banks were compelled to close physical branches to adhere to social distancing guidelines. Given the importance of the banking sector to economic development, understanding the consequences of COVID-19 on efficiency and growth trajectory of this sector is crucial for ensuring its sustainability. By drawing data from annual reports of 13 publicly quoted banks in Nigeria from 2019q1 to 2021q2 (pre and post COVID-19), this study investigates the impact of COVID-19 pandemic on efficiency and growth trajectory of the banking sector. The data obtained were mainly analysed using DEA and LGCM. The DEA results show an upward trend in the average scores of technical efficiency, pure technical efficiency, and scale efficiency in both periods. The LGCM results reveal a statistically insignificant difference in banks' growth trajectory (rate of change) in both periods. Overall, our analyses suggest that the outbreak of COVID-19 does not threaten the efficiency and growth trajectory of the banking sector. However, the insignificant difference between the pre and post nationwide lockdown suggests that there is an insignificant improvement in the efficiency of the banking sector during the post nationwide lockdown period. These findings offer practical implications for banks, regulators, and policymakers regarding the unprecedented uncertainty caused by the COVID-19 pandemic.

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Determinants of commercial bank loan and advance disbursement: the case of private Ethiopian commercial banks

Cited by 5 publications

References 45 publications

Resource-based productivity in the closed banking sector: the case of Ethiopian banks

Resource-based productivity in the closed banking sector: the case of Ethiopian banks

The Effect of Credit Risk and Board Diversity on the Performance of Banks Listed on the Indonesian Stock Exchange

The impact of COVID-19 on the banking sector’s efficiency and growth trajectory

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