{"title":"Factors Determining Banks’ Loan and Advance: A Case Study on Commercial Banks in Ethiopia","authors":"Hussen Abdulkadir Roba, Habtamu Alebachew Legass","doi":"10.11648/j.jfa.20231103.17","DOIUrl":null,"url":null,"abstract":": Commercial banks are the most important depository organizations that provide loan and advance in developing country. The objective of this study was to provide empirical evidence on determinants of banks’ loan and advances in Ethiopia. Fixed effect balanced panel regression was used for the data of ten purposively chosen commercial banks over the period of 12 years (2010 to 2021). To realize the stated objective quantitative approach and explanatory design were employed using secondary data sources from the audited financial statement. Consequently bank specific, industry specific and macro-economic variable that affect banks’ loan were selected and analyzed by using E-view 10 econometrics software. According to the findings, capital adequacy, liquidity ratio, bank size, and foreign exchange rate all have a positive and statistically significant impact on bank loans. Profitability ratios, cash reserve ratios","PeriodicalId":39488,"journal":{"name":"Afro-Asian Journal of Finance and Accounting","volume":null,"pages":null},"PeriodicalIF":0.0000,"publicationDate":"2023-06-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Afro-Asian Journal of Finance and Accounting","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.11648/j.jfa.20231103.17","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q3","JCRName":"Economics, Econometrics and Finance","Score":null,"Total":0}
引用次数: 0
Abstract
: Commercial banks are the most important depository organizations that provide loan and advance in developing country. The objective of this study was to provide empirical evidence on determinants of banks’ loan and advances in Ethiopia. Fixed effect balanced panel regression was used for the data of ten purposively chosen commercial banks over the period of 12 years (2010 to 2021). To realize the stated objective quantitative approach and explanatory design were employed using secondary data sources from the audited financial statement. Consequently bank specific, industry specific and macro-economic variable that affect banks’ loan were selected and analyzed by using E-view 10 econometrics software. According to the findings, capital adequacy, liquidity ratio, bank size, and foreign exchange rate all have a positive and statistically significant impact on bank loans. Profitability ratios, cash reserve ratios
期刊介绍：
Finance and accounting are seen as essential components for the successful implementation of market-based development policies supporting economic liberalisation in the rapidly emerging economies in Africa, the Middle-East and Asia. AAJFA aims to foster greater discussion and research of the development of the finance and accounting disciplines in these regions. A major feature of the journal will be to emphasise the implications of this development and the effects on businesses, academics and professionals. Topics covered include: -Asset pricing, corporate finance, banking; market microstructure -Behavioural and experimental finance; law and finance -Emerging economies: finance, audit committees, corporate governance -Islamic finance, accounting and auditing -Equity analysis and valuation, venture capital and IPOs -National GAAP and IASs compliance, harmonisation and strategies -Financial measurement/disclosure, and the quality of information reported -Accountability and social/ethical/environmental measurement/reporting -Cultural, political, institutional impact on financial measurement/disclosure -Accounting practices for intellectual capital and other intangible assets -Provision of non-audit services and impairment to auditor independence -Audit quality and auditor skills; internal control/auditing -Management accounting, control and /use of key performance indicators -Accounting education and professional development, accounting history -Public sector and not-for-profit accounting
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