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THE ASSESSMENT ON THE CONTRIBUTION OF
COMMERCIAL BANK OF ETHIOPIA
JIMMA MAIN BRANCH FOR THE DEVELOPMENT OF JIMMA TOWN
A RESEARCH PROPOSAL SUBMITTED TO CONDUCT
IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF BACHELOR OF ARTS IN BANKING AND
FINANCE
PREPARED BY: ZEGEYE GETIE
ADVISOR: ATO DEMISS H/GEBREAL AND
W/RT FREGENET MANALHE
DEPARTMENT OF BANKING AND FINANCE
DEC. 2010
ACKNOWLEDGEMENT
First of all I would like to offer my
deepest thanks to Ato Demis H/gebriel and W/rt Fregenet Manalhe for their
valuable work and continuous help during the process of writing this research
proposal, and also I would like to tank. Our other instructors and my friends
those provides a constrictive idea for us to conduct this research proposal.
ABSTRACT
Background: The commercial bank of
Ethiopia Jimma main branch is one type of financial institution which is
located in Jimma, 346 km for from Addis
Ababa
The study, therefore focuses this
society in particular to evaluate the contribution of the mention financial
institution to the development of the society.
Objective:- The main objective of the
study will be to assess the contribution of financial institution to the
development of the society. It will be specifically analyses in depth the bank
contribution to the local people and the people awareness about the importance
of financial institution (The bank under study).
Methodology: the study will mainly
based on primary data that are obtained at origin from the society, the data
will be obtained through interview, quaternary and observation. The secondary
data also concerned.
Data processing and analysis:- after
the data will gathered from the society through different methods, it will be
analysis and discussed qualitatively and quantitatively to the indicated result
TABLE OF CONTENTS
CHAPTER ONE
1. INTRODUCTION
1.1 Background of the study
The financial sector playes a
critical role in the process of economic development by effectively
mobilization and locate financial resources for their most productive uses. The
development of financial sector, reducing information a symmetry and
transaction costs encouraged financial savings and investment. Since investment
is the core point of economic development. A bank makes investment in
government securities and in the stocks of large reputed industrial concerns.
While in case of loan the bank advances many against recognized sequrity and
bills. (International trade and Bank and many page 153).
Commercial bank of Ethiopia Jimma branch
is one branch of commercial bank of Ethiopia among from 305 banks which is found
south west of Addis Ababa
Commercial bank of Ethiopia create
job opportunities to those individuals taking alone, by providing working
capital (fund) to operate their business activities and receive return as
interest for the principal they lend. So creating job opportunity increases the
individuals living standard and this inturn increase the assets of individuals
as well as the bank, these also leads to economic development of the country
(From the Bank manual).
Currently commercial bank of Ethiopia
-
Term
loans (short medium and long term loans)
-
Over
draft
-
Merchandise
loans
And the bank accepts the following
assets as collateral.
-
Building/houses
-
Motor
vehicles
-
Construction
machinery
The idea that initiated for this
study is to understand the problem of commercial bank of Ethiopia
The reason for the study is to assess
the contribution of commercial bank of Ethiopia
for the economic development of the society it specially in depth the bank
contribution of the local people and increasing the people’s awareness about
the importance of the commercial bank of Ethiopia
1.2. Background of the organization
Among banks in Ethiopia , commercial bank of Ethiopia
From its establishment in 1942 up to
now, commercial bank of Ethiopia
It is the first bank in Ethiopia to
introduce the service like automated teller motion (ATM), western union and mony
transfer to the customer currently commercial bank of Ethiopia has about 3
million account holders and more than 8000 talented and committed employees.
As we know Jimma is one of the well
known coffee traded regions in Ethiopia
Commercial bank of Ethiopia Jimma
Branch was established at 3235 square meters with mapping cost of 203, 335 birr
for the ground to make living and construction cost of 819.120,17 birr and with
a total cost of 1.594,942.42 Birr.
Since its establishment the bank
provides current account, saving account, Loans and other services to its
customers from the early establishment and now Commercial Bank of Ethiopia
Jimma Branch provides many services to its customers and potential customers.
The provision of loans is one types
of services lender and the borrower in particular and the country in
general. By having these importance in
mind, the researcher gives a great emphasize to study about the loan repayment
situations in this branch.
1.3 Statement of the problem
The bank promotes economic
development by gathering the supply of funds from millions of individuals,
depositors and making them available to investors those a real assets. In performing these function the commercial
banks improve the well being of both depositors and investors by improving
economic efficiency that arises their living standard. Banks contribution in Economic development of
the society may have some problems in multi direction, either the bank fails to
provide a qualified service or on the customer side may have problem like that
of lack of peoples awareness about the bank significance or service.
In order to these problem the
researcher will attempt to address the following quations.
1. What are the contribution of the bank
for the economic development of the country?
2. What are the problem that affect the
delivering of bank product or service?
3. What are the factors that affect the
banks contribution on the customer side?
4. What is the attitude of the people
towards the bank service?
5. What are the methods that improve the
contribution of commercial bank of Ethiopia for the development of Jimma Town
1.4 Objective of the study
1.4.1 General Objective
The main objective of this study is
to identify the contribution of commercial bank of Ethiopia
1.4.2 Specific Objective
In addition to the general objective,
the study has its own specific objective, they are
-
To
assess the basic contribution of the bank for the economic development of the
country.
-
To
investigate the problems that affect the delivering of bank product/service/.
-
To
assess the factors that affect the bank’s contribution on the customer side.
-
To
investigate the attitude of the people towards the banks service.
-
To
assess best methods that improves the contribution of commercial bank of Ethiopia
1.5 Significance of the study
The study is expected to have a great
significance both for the financial institution (the bank) can get the
necessary details about problems that related to their economic contribution
and on the other hand the society increases their awareness about the financial
institution (bank) products and it may enable the society to capitalize the
opportunity the bank provide to make use
of idle resource.
The study may play great role by
informing commercial banks function for the society and identify correct their
problems, which may help to eliminate (to reduce) poverty, creating an
awareness of a society and properly usage of loans, improve and increase at the
over all development.
1.6 Scope /Delimitation of the study
The Commercial Bank of Ethiopia
The study will be delaminated on this
local society in particular to assess the contribution of Commercial Bank of Ethiopia
1.7 Limitation of the study
While conducting the study the
researcher will face different obstacles such as lack of availability of
adequate reference material in the bank lack of adequate time, financial
constraints will be create difficulty on smooth operation of these proposal
work.
CHAPTER 2
2. LITERATURE REVIEW
The role of Commercial Bank in
developing country besides performing the usual commercial banking function,
bank in developing countries play an effective role in their economic development. The majority of people in such countries are
poor unemployed and engaged in traditional agriculture. There is acute shortage
of capital, people lack initiative and enterprise, means of transport are
undeveloped industry is depressed. The role of commercial bank in developing
country is discussed as under.
Financing policy:- The commercial
banks financing industrial sector in a number of ways, they provide short term,
medium term and long term loans to the industries sector.
Financing Trade:- The commercial
Banks help the financing both internal and external trade. The banksprovide
loans to retailers and whole salers to stock goods in which they deel. They
also helping the movement of goods from one place to another by providing all
types of facilities such as discounting
and accepting billes of exchange, providing over draft facilities, issuing
drafts etc. moreover they finance both export and import of developing counties
by providing foreign exchange facilities to importers and exporters of goods.
Financing agriculture:- The
commercial bank typs helps the large agricultural secter in developing counties
in a number of ways. They provide loans to traders in agricultural commodities.
They open a network of branches in rural areas to provide agriculturalist for
the marketing of their produce for the modernization and mechanization of their
farms, for providing irrigation facilities for the developing land.
Financing consumer activity:- people
in under developed counties being poor and having law income do not possess
sufficient financial resources to buy durable consumer goods the commercial
banks advance loans to consumers for the purchase of such items as houses,
scooters, fans, refrigerator’s etc. in this way, they also help in raising the
standard of having of the pole in developing counties by providing loans for a
consumptive activity.
Help in monitory policy:- commercial
bank the economic development of a country by faithfully following the monetary
of the central bank. Thus the commercial banks contribute much to the growth of
a developing economy by granting loans to agriculture trade and investment by
helping in physical and human capital formation. (Many, Banking and International Trade page
136-37)
2.1. Foreign AID/LOAN
The present world order has made
different countries to have different economic level of development. The broad
classification is developed (The first world), Transition (countries which were
in the socialist camp and called second world) and developing (third world).
The most pressing concern of the
governments of developing counties and their priority objectives are increase
the out put level of the economy (growth and development), reduce their huge
unemployed labor force, balance their income distribution develop the level of
education and health facilities.
Foreign aid/loan, as one of the major
source of development should be managed in away that can bring about
sustainable development.
2.2. Function of commercial bank
Commercial banks perform a variety of
functions which can be divided as accepting deposits, advancing loan, credit
creation financing foreign trade, agency services and miscellaneous services to
customers.
CHAPTER THREE
METHODOLOGY
3.1. Source of data
In this
paper both primary and secondary data sources were used. The primary data will
be collected from managers. Employs and customers of commercial bank of
Ethiopia Jimma branch.
The
secondary data will be obtained from monthly and quarterly progress report and
audit report of commercial bank of Ethiopia Jimma branch.
3.2. Method of data collection
As the source
is identified above, both primary and secondary data were collected
systematically to get realistic information from concerned bodies in collecting
primary data questionnaires and unstructed interview were used. The
quaternaries has both open ended and close ended types. The open ended question
help respondent to express their idea in an unlimited may and close ended
provide actualize questions to the respondent.
3.3. Method of sampling
The data
will be collected from the current customer and employee of the bank. The
researcher will select sampling by using non-probability techniques depending
on the range of elements of the target population. In this case judgmental or purposive
sampling techniques will preferred the researcher will be obtained qualitative
and quantitative data from the target population.
The reason
why this sampling technique used is that much less complicated to collect
data’s less expensive and it also less time taking, and it also enables the
researcher to get the required data only from the conserned bodies.
The study will
ask a list of questions and the total population or the target group for this
study is that 2470. from this 2470, 2407 are the customer of commercial bank of
Ethiopia
The
researcher will select 100%(63) of the employees of the bank by using
judgmental sampling and 100 customers of the bank by using random sampling as a
sample. So the total sample size will be 163.
3.4. Method of data analysis
After the
relevant data will be collect descriptive method of data analysis were used.
The analysis indicate transformation of raw data in to a form that makes easy
to under stand and interest it.
Those to
interpret the identified data, it sold be write in the form of tabulation,
percentage and pie chart, to facilities the process of comparation, summation
and cumulative of data.
CHAPTE R 4
4.1. Time budget
In order to manage the overall
research process it needs time budget. The table given bellow shows that the
time that will be taken from topic selection to final presentation.
No
|
Activity
|
Oct
|
Nov
|
Dec
|
Jan
|
Feb
|
Mar
|
Apr
|
May
|
1
|
Topic selection
|
X
|
|||||||
2
|
Preparation of research proposal
|
X
|
|||||||
3
|
Recommendation of comments to 1st
draft of the proposal
|
X
|
|||||||
4
|
Typing of final proposal
(submition)
|
X
|
|||||||
5
|
Collection of proposal
|
X
|
|||||||
6
|
Data collection
|
X
|
|||||||
7
|
Data analysis
|
X
|
|||||||
8
|
Submition of first draft research report
comment
|
X
|
|||||||
9
|
Typing of final report
|
X
|
|||||||
10
|
Submition of final research
|
X
|
|||||||
11
|
Presentation
|
X
|
4.2. Cost budget
In order to undertake the research
process effectively and efficient, it is necessary to prepare cost budget. The
table given below shows the cost that is expected will be incurred in the
research process.
Item
|
Quantity
|
Duration in day
|
Unit cost
|
Total cost
|
Personal cost
Researcher consumption
|
6
|
5
|
30 Br
|
|
Transportation
|
6
|
3
|
18 Br
|
|
Typist
|
150
|
150
|
||
Equipment printing and duplicating
|
3x50
|
0.30
|
45 Br
|
|
Paper
|
2
|
70
|
140 Br
|
|
Pen
|
4
|
3
|
12 Br
|
|
Pencil
|
2
|
1
|
2 Br
|
|
Ruler
|
1
|
2
|
2 Br
|
|
Miscellaneous expense
|
450
|
|||
Total
|
849
|
BIBLIOGRAPHY /REFERENCE
-
Many
Banking international trade 7th edition
-
Economic
development 9th edition.
-
Loyd
B. Thomas, many, Banking and financial markets, 1996
-
Manual
of the bank
QUESTIONNAIRE
This questionnaire is designed to
collect information on “the contribution of commercial bank of Ethiopia
You are kindly requested to complete
these question sincerely on honestly. All information you provided will be kept
with strict confidence and will not be used for any other purpose except for
intended academic research.
Tick the appropriate boxes are
applicable to you and fill is the relivant information.
I.
General background
Age:-
20-355 36-505 51-65 5 >655
Sex:- Male
5 Female
5
Occupation:-
Merchant
5 Farmer
5
Employee
5 Other
5
Religion:- Orthodox 5 Protestant
5
Muslim 5 Others
5
II.
Family members (in number)
Male
5 Female
5
1. How much is your monthly income?
0-50 5 51-1005 101-300
5 301
-600 5 601-1200
5 1201
– 2000 5 2001
– 3000 5 >
3000 5
2. Is there any problem with regarding
to the delivering of bank product /service/?
Yes 5 No
5
3. If your answer for Q 2 is Yes Please
mention
Some of them 1. __________________________________________
2.
__________________________________________
3.
__________________________________________
4.
__________________________________________
4. If you are customer of the bank, is
there any loan that you haven’t repaid?
Yes 5 No
5
5. If your answer for Q 4 is yes, why?
_____________________________________________________________________________________________________________________________
6. If your answer for Q. 4 is No, did
you repaid the loan at a time?
Yes 5 No
5
7. Is there a problem that affect the
bank’s contribution on the customer side?
Yes 5 No
5
8. If your answer for Q 6 is yes can you
mention some of them?
1. __________________________________________________________
2. __________________________________________________________
3. __________________________________________________________
4. __________________________________________________________
5. __________________________________________________________
9. If you are currently using the bank,
How much you are satisfied by the service rendered?
Very much 5 much
5 Little
5
10. If your answer for Q 8 is little why?
_____________________________________________________________________________________________________________________________________________________________________________________________
11. Have you ever asked for bank loan
previously?
Yes 5 No
5
12. If your answer for Q 10 is yes for
what purpose
5 To start new business
5 To expand my previous business
5 For building house
5 For farming purpose
5 For commercial purpose
13. If your answer for Q 11 is No
explain the reason?
___________________________________________________________________________________________________________________________________________________________________________________________
14. What is your attitude towards the
bank service?
Very good 5 Good
5 Poor
5
15. If your answer for Q 13 is poor why?
____________________________________________________________________________________________________________________________________________________________________________________
16. How much the bank contribute to the
development of the society?
Very much 5 Little 5 None 5
17. In what way the bank contribute to
the society development?
Increases in per capital
income 5
Road construction 5
Building Real estate 5
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ITS GOOD RESEARCH PLEASE KEEP IT UP
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