College of Bussines and Economics
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College of Bussines and Economics
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Item CORPORATE GOVERNANCE AND ITS IMPACT ON PERFORMANCE (SOCIAL AND FINANCIAL): EVIDENCE FROM MFIs IN ETHIOPIA(wolkite university, 2021-06-05) SANI NISRANE MOHAMMEDThe study was aimed to look at the effect of corporate governance attributes on the social and financial performance of in MFIs Ethiopia. Explanatory research design with quantitative research approach was employed to carry out the study. From 35 legally registered microfinance institutions at NBE and AEMFIs, 16MFIs were selected based on the availability of data to investigate the effect of corporate governance variables such as board size, board educational qualification, board experience in the financial sector, meeting frequency of the board, board audit committee size and CEO with dual responsibility on social (breath of outreach and depth of outreach) and financial performance of MFIs measured by Number of Active Borrowers, Gross Loan Portfolio and Return on Asset respectively. In addition to main explanatory variables, control variables MFIs Size were also included within the study variables. Both primary and secondary data were used in which primary data regarding board characteristics was collected through questionnaire and secondary data was obtained from MFIs, NBE and AEMFIs. Panel data covering six year from 2014-2019 was analyzed for sixteen microfinance institutions. The regression results revealed that board size, board educational qualification, meeting frequency and CEO with dual responsibility have positive relationship with financial performance of MFIs while board experience in the financial sector, board audit committee size and firm size has statistically negative relationship. Board educational qualification, meeting frequency, audit committee size and firm size have positive relationship with social (breath of outreach) while board size, board experience in the financial sector, and CEO with dual responsibility have negative relationship. Board size, Board educational qualification, audit committee size and firm size have positive relationship with social (depth of outreach) while board experience in the financial sector, meeting frequency and CEO with dual responsibility have negative relationship. Based on empirical result of the study, it is recommended that CEO with dual responsibility should be separate for better performance. Furthermore, in order to reduce the problem of management failures which put at risk the money obtained from the public and other sources, the governance mechanisms of MFIs have to be effective (i.e. creating and maintaining a business environment that motivates managers and entrepreneurs to maximize firm’s operational efficiency, returns on investment and or on equity and long term productivity).Item CORPORATE GOVERNANCE AND ITS IMPACT ON PERFORMANCE (SOCIAL AND FINANCIAL): EVIDENCE FROM MFIs IN ETHIOPIA(wolkite university, 2021-03-09) SANI NISRANE MOHAMMEDThe study was aimed to look at the effect of corporate governance attributes on the social and financial performance of in MFIs Ethiopia. Explanatory research design with quantitative research approach was employed to carry out the study. From 35 legally registered microfinance institutions at NBE and AEMFIs, 16MFIs were selected based on the availability of data to investigate the effect of corporate governance variables such as board size, board educational qualification, board experience in the financial sector, meeting frequency of the board, board audit committee size and CEO with dual responsibility on social (breath of outreach and depth of outreach) and financial performance of MFIs measured by Number of Active Borrowers, Gross Loan Portfolio and Return on Asset respectively. In addition to main explanatory variables, control variables MFIs Size were also included within the study variables. Both primary and secondary data were used in which primary data regarding board characteristics was collected through questionnaire and secondary data was obtained from MFIs, NBE and AEMFIs. Panel data covering six year from 2014-2019 was analyzed for sixteen microfinance institutions. The regression results revealed that board size, board educational qualification, meeting frequency and CEO with dual responsibility have positive relationship with financial performance of MFIs while board experience in the financial sector, board audit committee size and firm size has statistically negative relationship. Board educational qualification, meeting frequency, audit committee size and firm size have positive relationship with social (breath of outreach) while board size, board experience in the financial sector, and CEO with dual responsibility have negative relationship. Board size, Board educational qualification, audit committee size and firm size have positive relationship with social (depth of outreach) while board experience in the financial sector, meeting frequency and CEO with dual responsibility have negative relationship. Based on empirical result of the study, it is recommended that CEO with dual responsibility should be separate for better performance. Furthermore, in order to reduce the problem of management failures which put at risk the money obtained from the public and other sources, the governance mechanisms of MFIs have to be effective (i.e. creating and maintaining a business environment that motivates managers and entrepreneurs to maximize firm’s operational efficiency, returns on investment and or on equity and long term productivity).Item Factors affecting FINANCIAL PERFORMANCEOF COMMERCIAL BANKS in ETHIOPIAN(Wolkite University, 2024-09-03) ABDRAHMAN DULAThis study investigates factors affect the financial performance of commercial banks in Ethiopia. The primary objective is to examine how various factors impact bank performance. A mixed methods approach was employed, utilizing both quantitative and qualitative data. The study utilized secondary data obtained from annual reports of selected commercial banks and the National Bank of Ethiopia for a period of 7 years (2017-2023). The study assessed the relationship between selected corporate governance variabls, and bank performance as measured by ROA. Additionally, primary data was collected through structured questionnaires distributed to board secretaries and senior management of sampled banks. The data were analyzed using descriptive statistics, correlation analysis, and panel data regression techniques. The findings reveal significant associations between corporate governance variables and financial performance measures. Specifically, board size and the existence of audit committees were found to have negative impacts on financial performance, suggesting potential inefficiencies in decision-making processes and bureaucratic constraints. Conversely, higher levels of capital adequacy and capital ratios were positively correlated with improved financial performance, highlighting the importance of maintaining adequate capital reserves to support stability and resilience. However, loan to deposit ratios did not exhibit a significant impact on financial performance, suggesting the need for further investigation into lending practices and liquidity management strategies. Recommendations for future research include longitudinal studies to assess the long-term effects of corporate governance reforms, comparative analyses across industries or regions, and qualitative investigations into the underlying mechanisms driving governance-performance relationships. Additionally, exploring the role of emerging technologies in governance effectiveness and financial performance could offer innovative avenues for future inquiry in the Ethiopian banking sector. Overall, these findings provide valuable insights for policymakers, regulators, and banking stakeholders aiming to enhance corporate governance practices and optimize financial performance in Ethiopia's banking industry.Item DETERMINANTS OF FINANCIAL PERFORMANCES OF PRIVATE BANKING IN ETHIOPIA: EMPHASIS AT ALL PRIVATE COMMERCIAL BANKS(WOLKITE UNIVERSITY, 2018-10) MULUGETA MESFIN MELESEThe main purpose of this study was to assess the determinants of Performances of Private Commercial Banks in Ethiopia. In order to meet the objectives of the study, a descriptive and relational research design method was employed. The target population of the study comprised all Private Commercial Banks in Ethiopia that were selected through census sampling method. Whereas, the study period 2010 2016 was purposively selected. Financial statements, during the study period, of private banks were obtained from NBE. These financial statements were then used to generate panel data, which comprises all the financial ratios regarding the dependent variables and bank specific independent variables. Accordingly 101 sample cases of bank specific financial ratios are obtained. Macro economic data for the study period were also collected from NBE and CSA publications. Descriptive analyses of financial ratios were generated to reflect average and relative performance of individual private banks. The overall average financial performances of private banks were 2.61% and 17.96% for ROA and ROE, respectively. Regarding the internal financial ratios, almost all the private banks adhered to the threshold ratios set by the NBE. However, these banks have considerable differences in their internal ratios, where banks in good position regarding one ratio are found to have lower position in another. Mainly, correlation and regression analyses employed in the research revealed profitability of banks were mainly related and influenced by their internal specific bank ratios; whereas the external and macro variables were not found to have significant effect in their performance. Both ROA and ROE had significant negative correlations with CA and ME; while positively related with AQ and BSize. However, the relationships were more stronger for ROE than ROA. Mainly Management efficiency and capital adequacy were the most explanatory to ROA of the banks; together they explained 69% of the variation on the banks return on asset. While, these two ratios together with liquidity and asset quality aredeterminants to the banks ROE; they have about 75% explanation power. It is therefore, clear that the bank specific ratios have considerably strong influence on profitability of private commercial banks. Therefore, it is recommended that in order to assess the banks performance with regard to ROA and ROE, it is worth advisable to optimally adjust the CAMEL ratios, while mainly pay regards to the management efficiency and capital adequacy ratios.