Thesis Open Access
Determinants of Banks Interest rate spread: An Empirical Evidence from Ethiopian Commercial Banks
Aregu Asmare
The banking sector plays a fundamental role in economic growth, as it is the basic element in the channeling of funds from lenders to borrowers. Efficient financial intermediation is an important factor in economic development process as it has implication for effective mobilization of investible resources. A major indicator of banking sector efficiency is interest rate spreads. Thus, this study examines the bank, industry and macro-economic specific factors affecting banks interest rate spread for a total of eight commercial banks in Ethiopia, covering the period of 2004-2013. To this end, the study adopts a mixed research approach by combining document analysis and in-depth interviews. The findings of the study show that credit risk, liquidity risk, , operating cost, concentration, reserve requirement, gross domestic product , interest rate volatility and exchange rate volatility have statistically significant and positive relationship with banks interest rate spread
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- Publication date:
- June 1, 2014
- DOI:
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- License (for files):
- Creative Commons Attribution