MSC in Accounting and Finance

Permanent URI for this collectionhttps://etd.hu.edu.et/handle/123456789/135

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PRACTICE, OPPORTUNITIES, AND CHALLENGES OF E-TAX SYSTEM IN MINISTRY OF REVENUE: THE CASE STUDY OF HAWASSA BRANCH OFFICE
(Hawassa University, 2024-03) DEREJE DANIEL TONA
The study focused on the assessing practice, opportunities and challenges of e-tax system in Ethiopia's Ministry of Revenues Hawassa branch office. The study adopted descriptive research design and data was collected through the use of questionnaires and structured interview. A sample of 269 tax payers and 143 employees of the branch were included in the study. The study used SPSS Version 27 to analyze the feedback and generate descriptive statistics. The result of the study shows that the branch office has started applying the system since 2021 and most of the tax payers are using the new system. But still there are some tax payers who do not started using the system. Benefits of e-tax adoption and development as perceived by the Ministry of Revenue and tax payers are: reduces paper work, reduce transportation cost, reducing errors of calculating due tax, and decrease the queue of the tax office. The focus of government on digitalization and encouragement of cashless transaction, and increasing digital payment system in the country are some of the opportunities for the implementation of electronic tax system. The lack of adequate coordination between banks and tax office, weak internet services, frequent power disruption, overcrowding of the server at the end of the month, and lack of local language are considered the basic challenges facing the implementation of e-tax system. The study advised tax office to work with stake holders and to improve the system to offer full package of an electronic tax system.
DETERMINANTS OF NON PERFORMING LOAN: THE CASE OF COMMERCIAL BANKS IN ETHIOPIA
(HAWASSA UNIVERSITY, 2024-03) Netsanet Engida
Non-performing loans (NPL) are a critical issue for the banking sector in Ethiopia. NPLs can have a significant negative impact on a bank's profitability, stability, and overall financial health. As such, understanding the determinants of NPL in Ethiopian commercial banks is essen tial for effective risk management and regulatory oversight. Ethiopia has a rapidly growing economy, with a banking sector that has seen significant expansion in recent years. However, this growth has also brought challenges, including an increase in NPLs. Identifying the key fac tors that contribute to NPLs in Ethiopian commercial banks is crucial for developing strategies to mitigate these risks and ensure the long-term sustainability of the sector. This study aims to contribute to the existing literature on NPLs by examining the key determinants of NPL in Ethio pian commercial banks. To achieve this objective, ten banks with ten years of data ranging from 2013-2022 were selected for analysis. A positivism knowledge claim was adopted, along with a quantitative research approach and an explanatory research design. The results of the OLS re gression analysis revealed that five variables, namely loan growth rate (LGR), bank size (BS), return on assets (ROA), interest rate (IR), and inflation rate (INF), have a statistically significant effect on NPL in Ethiopian commercial banks. This implies that factors such as loan portfolio quality, bank size, profitability, and macroeconomic conditions play a crucial role in determin ing the level of NPLs in the banking sector. On the other hand, variables such as return on equity (ROE), capital adequacy (CA), and gross domestic product (GDP) were found to have a statisti cally insignificant effect on NPL. These findings provide valuable insights for policymakers, reg ulators, and bank management in Ethiopia to develop effective strategies for managing NPLs and promoting a sound and stable banking secto
DETERMINANTS OF DIVIDEND PAYOUT IN SELECTED PRIVATE COMMERCIAL BANKS IN ETHIOPIA
(HAWASSA UNIVERSITY, 2024-03) YOHANNES HAILU
Examining the internal determinants of dividend payout in selected private commercial banks in Ethiopia is an important topic of study for several reasons. Firstly, dividend payout is an essential component of corporate governance and provides valuable insights into a bank's financial health and management's efficiency. Understanding the factors that influence dividend payout decisions can help investors and stakeholders assess the bank's profitability, stability, and future prospects. Secondly, Ethiopia's banking sector is undergoing significant changes and reforms, such as the liberalization of the industry and the emergence of private commercial banks. Thus, analyzing the determinants of dividend payout in these banks can shed light on the specific challenges and opportunities faced by private banks in Ethiopia's unique economic context. Lastly, this study can contribute to the existing literature on dividend policy, expand the knowledge base on Ethiopian banking, and inform policymakers and regulators in developing effective regulations and policies for the banking sector. This study examines the determinants of dividend payout in selected private commercial banks in Ethiopia from 2012-2022. Using a quantitative research approach with correlational design, the study investigates the effects of profitability, liquidity, size, leverage, growth of gross earnings, and previous year's dividend payout on dividend distributions. Depend on findings the study has given suitable suggestions to determinants of dividend payout in selected private banks in Ethiopia.
AFFORDABLE HOUSING DEVELOPMENT AND PROVISION PRACTICES IN HAWASSA CITY, SIDAMA NATIONAL REGIONAL STATE.
(HAWASSA UNIVERSITY, 2024-03) DIRIBA DANSE RIBISO
Housing affordability is one of the key issues at global scale for which either Ethiopia or Hawassa cannot be exceptional. This is because housing for human beings is not only a matter of sheltering but also a protection from natural and social dangers. Accordingly, this study aims to examine the extent and seriousness of the housing affordability and prevailing practices in Hawassa City, Ethiopia. Primary data was collected from the study area through questionnaire surveys, structured and semi-structured interviews, observations, focus group discussions and through desk review based on the sources for secondary data. Besides, quantitative techniques were used to analyze the collected data. The study results suggest that there is a need for effective policy intervention and an inclusive housing system, as well as cooperation and partnership between major interest groups, as tools for future policy development to tackle the housing problem in the study area. Government intervention through sound housing policies is necessary to ensure housing provision for citizens in the nation.
FACTORS AFFECTING EFFECTIVE UTILIZATION OF PUBLIC BUDGET: A CASE OF SELECTED PUBLIC ORGANIZATIONS IN HAWASSA TOWN ADMINISTRATION, SIDAMA REGIONAL STATE, ETHIOPIA
(Hawassa University, 2024-03) BETELIHEM NEGASH
The aim of this study was aimed to investigate factors affecting effective utilization of public budget in selected public organizations in Hawassa Town Administration. This study used descriptive and explanatory research design. The research used non-probability sampling technique to select samples. Population of the study was taken from six public organizations in Hawassa City administration who are working in plan preparation directorate, finance administration and internal audit directorate by selecting purposely a total sample of 138 respondents. In the selection, census sampling technique was employed. Primary data was collected using five Point Likert-Scale questionnaires, and out of 138 survey questionnaires 132 responses were properly filled and returned. Then the responses were analyzed using statistical Package for Social Sciences (SPSS) version-25 and Stata-14 and summarized to relate the variables that were collected from questionnaires. Both descriptive and binary logistic analysis was used to analyze the responses. The descriptive analysis result shows that all independent variables such as staff competency, stakeholder’s involvement, information technology, finance rules and regulations and auditing & monitoring had got moderate mean score. These results suggest that a numbers of respondents were not fully satisfied on level practice of these variables. From spearman correlation analysis result, five independent variables have a positive and significant relationship with the dependent variable of effective budget utilization of public sectors in Hawassa City Administration at 99% confidence level. As per the result of binary logistic regression analysis the researcher concluded that the five predictor variables (i.e., staff competency, stakeholder’s involvement, information technology, finance rules and regulations and auditing & monitoring) had significant effect on the dependent variable effective public budget utilization) in the study area. Finally the study recommended that the study public organizations should improve practice of staff competency activities, stakeholder’s involvement, information technology, finance rules and regulations and auditing & monitoring in order to increase the probability of improvement of the existing budget utilization status of public organizations.
THE EFFECT OF LOAN DELINQUENCY ON FINANCIAL PERFORMANCE OF MICRO FINANCE INSTITUTION IN ETHIOPIA
(Hawassa University, 2024-03) ASAYE KONTAMO
This study examines the impact of loan delinquency on the financial performance of 11 microfinance institutions in Ethiopia from 2008 to 2021. Using a quantitative research approach with an explanatory research design, the researcher employs regression analysis to investigate the determinants of return on assets (ROA). The findings align with prior research, showing a negative relationship between nonperforming loans (NPL) and ROA. Higher NPLs indicate increased credit risk and potential losses, consistent with theoretical expectations and previous studies. Similarly, a negative relationship is found between credit to deposit ratio (CDR) and ROA, suggesting that greater reliance on credit for funding is associated with higher risk and potentially lower profitability. However, the positive coefficients on capital adequacy (CA) and firm size (FS) confirm prior research indicating that well-capitalized and larger entities perform better financially. Surprisingly, the loan loss provision ratio (LLP) and cost per asset ratio (CPL) were found to be statistically insignificant in determining ROA. These results imply that the significance of these variables may be context-specific or subject to variations across industries or time periods. This study contributes to the understanding of the relationship between loan delinquency and financial performance in the Ethiopian microfinance sector.
FACTORS AFFECTING EFFECTIVE UTILIFFATION OF PUBLIC BUDGET: A CASE OF SELECTED PUBLIC ORGANIZATIONS IN HAWASSA TOWN ADMINISTRATION, SIDAMA REGIONAL STATE, ETHIOPIA
(HAWASSA UNIVERSITY, 2024-03) BETELIHEM NEGASH
The aim of this study was aimed to investigate factors affecting effective utilization of public budget in selected public organizations in Hawassa Town Administration. This study used descriptive and explanatory research design. The research used non-probability sampling technique to select samples. Population of the study was taken from six public organizations in Hawassa City administration who are working in plan preparation directorate, finance administration and internal audit directorate by selecting purposely a total sample of 138 respondents. In the selection, census sampling technique was employed. Primary data was collected using five Point Likert-Scale questionnaires, and out of 138 survey questionnaires 132 responses were properly filled and returned. Then the responses were analyzed using statistical Package for Social Sciences (SPSS) version-25 and Stata-14 and summarized to relate the variables that were collected from questionnaires. Both descriptive and binary logistic analysis was used to analyze the responses. The descriptive analysis result shows that all independent variables such as staff competency, stakeholder’s involvement, information technology, finance rules and regulations and auditing & monitoring had got moderate mean score. These results suggest that a numbers of respondents were not fully satisfied on level practice of these variables. From spearman correlation analysis result, five independent variables have a positive and significant relationship with the dependent variable of effective budget utilization of public sectors in Hawassa City Administration at 99% confidence level. As per the result of binary logistic regression analysis the researcher concluded that the five predictor variables (i.e., staff competency, stakeholder’s involvement, information technology, finance rules and regulations and auditing & monitoring) had significant effect on the dependent variable effective public budget utilization) in the study area. Finally the study recommended that the study public organizations should improve practice of staff competency activities, stakeholder’s involvement, information technology, finance rules and regulations and auditing & monitoring in order to increase the probability of improvement of the existing budget utilization status of public organizations
THE EFFECT OF LOAN DELINQUENCY ON FINANCIAL PERFORMANCE OF MICRO FINANCE INSTITUTION IN ETHIOPIA
(HAWASSA UNIVERSITY, 2024-03) ASAYE KONTAMO
This study examines the impact of loan delinquency on the financial performance of 11 microfinance institutions in Ethiopia from 2008 to 2021. Using a quantitative research approach with an explanatory research design, the researcher employs regression analysis to investigate the determinants of return on assets (ROA). The findings align with prior research, showing a negative relationship between nonperforming loans (NPL) and ROA. Higher NPLs indicate increased credit risk and potential losses, consistent with theoretical expectations and previous studies. Similarly, a negative relationship is found between credit to deposit ratio (CDR) and ROA, suggesting that greater reliance on credit for funding is associated with higher risk and potentially lower profitability. However, the positive coefficients on capital adequacy (CA) and firm size (FS) confirm prior research indicating that well-capitalized and larger entities perform better financially. Surprisingly, the loan loss provision ratio (LLP) and cost per asset ratio (CPL) were found to be statistically insignificant in determining ROA. These results imply that the significance of these variables may be context-specific or subject to variations across industries or time periods. This study contributes to the understanding of the relationship between loan delinquency and financial performance in the Ethiopian microfinance sector
EFFECT OF CREDIT MONITORING ACTIVITIES ON ASSET QUALITY: A CASE STUDY ON PRIVATE AND PUBLIC BANKS IN ETHIOPIA
(HAWASSA UNIVERSITY, 2024-03) DAWIT BEYENE
Credit monitoring activities play a crucial role in determining the asset quality of banks. Effective credit monitoring involves regularly assessing the creditworthiness of borrowers, analyzing their financial health, and evaluating potential risks associated with loans and investments. By actively monitoring credit, banks can identify and address any red flags or signs of non-performing or problematic loans at an early stage. This proactive approach allows banks to take appropriate measures to mitigate risks, such as restructuring or refinancing loans, resulting in improved asset quality. Moreover, credit monitoring activities enable banks to make informed decisions regarding credit extension, thereby ensuring that the loans offered are to creditworthy individuals or businesses, further enhancing the overall asset quality of the banks. This study examines the effect of credit monitoring activities on asset quality: a case study on private and public banks in Ethiopia. A response rate of 88.6% was achieved from respondent and both quantitative and qualitative data analysis tools were employed. The study concludes that the independent variables, namely collateral information, business ratings information, customer credit status information, and consumer default information, have a positive impact on asset quality in banks. Based on the study's findings, it is recommended that banks give more weightage to collateral information, business ratings information, customer credit status information, and consumer default information in their assessment of asset quality. By placing greater emphasis on these independent variables, banks can better identify and manage potential risks associated with loans and other credit facilities. It is imperative for banks to regularly update and upgrade their risk assessment models and systems to incorporate these variables effectively. Furthermore, banks should invest in technologies and data analytics tools that can provide accurate and real-time information on these variables, allowing for more informed lending decisions and ultimately improving their overall asset quality
DETERMINANTS OF LIQUIDITY RISK IN ETHIOPIAN MICROFINANCE INSTITUTIONS
(HAWASSA UNIVERSITY, 2024-03) TEKILE TESEMA
Studying determinants of liquidity risk in microfinance institutions (MFIs) in Ethiopia is important for several reasons: Liquidity risk refers to the ability of an institution to meet its financial obligations without incurring significant losses. If MFIs are unable to manage liquidity risk effectively, they may face financial instability or even bankruptcy. Hence, studying determinants of liquidity risk in microfinance institutions in Ethiopia is essential for ensuring financial stability, protecting client interests, promoting sector development, and aligning practices with international standards. This study examines the determinants of liquidity risk in Eleven Ethiopian microfinance institutions over the period 2009 to 2022. The study investigates the impact of eight independent variables, namely capital adequacy ratio, non-performing loan, lending interest rate, cost of fund, return on asset, rate of deposit, inflation, and gross domestic product, on liquidity risk. The regression analysis reveals that capital adequacy ratio, non performing loan, cost of fund, return on asset, and rate of deposit significantly influence liquidity risk in these microfinance institutions. However, lending interest rate, inflation, and gross domestic product do not exhibit a statistically significant relationship with liquidity risk. These findings provide valuable insights for policymakers and microfinance institutions in managing liquidity risk and ensuring financial stability.
EFFECT OF CREDIT MONITORING ACTIVITIES ON ASSET QUALITY: A CASE STUDY ON PRIVATE AND PUBLIC BANKS IN ETHIOPIA
(Hawassa University, 2024-04) DAWIT BEYENE
Credit monitoring activities play a crucial role in determining the asset quality of banks. Effective credit monitoring involves regularly assessing the creditworthiness of borrowers, analyzing their financial health, and evaluating potential risks associated with loans and investments. By actively monitoring credit, banks can identify and address any red flags or signs of non-performing or problematic loans at an early stage. This proactive approach allows banks to take appropriate measures to mitigate risks, such as restructuring or refinancing loans, resulting in improved asset quality. Moreover, credit monitoring activities enable banks to make informed decisions regarding credit extension, thereby ensuring that the loans offered are to creditworthy individuals or businesses, further enhancing the overall asset quality of the banks. This study examines the effect of credit monitoring activities on asset quality: a case study on private and public banks in Ethiopia. A response rate of 88.6% was achieved from respondent and both quantitative and qualitative data analysis tools were employed. The study concludes that the independent variables, namely collateral information, business ratings information, customer credit status information, and consumer default information, have a positive impact on asset quality in banks. Based on the study's findings, it is recommended that banks give more weightage to collateral information, business ratings information, customer credit status information, and consumer default information in their assessment of asset quality. By placing greater emphasis on these independent variables, banks can better identify and manage potential risks associated with loans and other credit facilities. It is imperative for banks to regularly update and upgrade their risk assessment models and systems to incorporate these variables effectively. Furthermore, banks should invest in technologies and data analytics tools that can provide accurate and real-time information on these variables, allowing for more informed lending decisions and ultimately improving their overall asset quality.
DETERMINANTS OF LIQUIDITY RISK IN ETHIOPIAN MICROFINANCE INSTITUTIONS
(Hawassa University, 2024-04) TEKILE TESEMA KIA
Studying determinants of liquidity risk in microfinance institutions (MFIs) in Ethiopia is important for several reasons: Liquidity risk refers to the ability of an institution to meet its financial obligations without incurring significant losses. If MFIs are unable to manage liquidity risk effectively, they may face financial instability or even bankruptcy. Hence, studying determinants of liquidity risk in microfinance institutions in Ethiopia is essential for ensuring financial stability, protecting client interests, promoting sector development, and aligning practices with international standards. This study examines the determinants of liquidity risk in Eleven Ethiopian microfinance institutions over the period 2009 to 2022. The study investigates the impact of eight independent variables, namely capital adequacy ratio, non-performing loan, lending interest rate, cost of fund, return on asset, rate of deposit, inflation, and gross domestic product, on liquidity risk. The regression analysis reveals that capital adequacy ratio, non performing loan, cost of fund, return on asset, and rate of deposit significantly influence liquidity risk in these microfinance institutions. However, lending interest rate, inflation, and gross domestic product do not exhibit a statistically significant relationship with liquidity risk. These findings provide valuable insights for policymakers and microfinance institutions in managing liquidity risk and ensuring financial stability.
N PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF SCIENCE IN URBAN AND REGIONAL PLANNING (SPECIALIZATION: URBAN PLANNING AND DEVELOPMENT)
(HAWASSA UNIVERSITY, 2024-05) DIRIBA DANSE RIBISO
Housing affordability is one of the key issues at global scale for which either Ethiopia or Hawassa cannot be exceptional. This is because housing for human beings is not only a matter of sheltering but also a protection from natural and social dangers. Accordingly, this study aims to examine the extent and seriousness of the housing affordability and prevailing practices in Hawassa City, Ethiopia. Primary data was collected from the study area through questionnaire surveys, structured and semi-structured interviews, observations, focus group discussions and through desk review based on the sources for secondary data. Besides, quantitative techniques were used to analyze the collected data. The study results suggest that there is a need for effective policy intervention and an inclusive housing system, as well as cooperation and partnership between major interest groups, as tools for future policy development to tackle the housing problem in the study area. Government intervention through sound housing policies is necessary to ensure housing provision for citizens in the nation
FFECT OF FINANCIAL LITERACY ON LOAN REPAYMENT PERFOR MANCE OF MEMBERS IN THE CASE OF DURO SHALLA SACCOs UNION WEST ARSI ZONE, REGIONAL STATE, ETHIOPIA
(HAWASSA UNIVERSITY, 2024-05) DUGASA MEKONNEN MULETA
Financial literacy is the possession of knowledge, skills, and attitudes that enable an individual to use money effectively by making sound informed financial decisions.The main purpose of this study was to assess the effect of financial literacy on the loan repayment performance of members in the Duroshalla Saving and Credit Cooperatives Union in the Oromia regional state of Ethiopia. The resrachrer investigated the effect of variables of such as demographiccharacteri stics, socio economic related and financial literacy variables such as budget literacy, debt man agement literacy, and saving literacy debt management literacy, budgeting literacy, bookkeeping literacy,and saving literacy.The syudy employed both explanatory and descriptive survey reseach design with mixed approach also purposive sampling andsimple random sampling technique used .The collected data was analyzed using descriptive statistics and binary logistic regression additnally used (SPSS)version 26. The result of this study has shown that age, education level, occupation, marital status, budgeting literacy, debt management literacy, and saving literacy var iables have positive and significant effect on the loan repayment performance of the members of Duroshalla SACCOs Union in West Arsi Zone, Oromia, Ethiopia. On the other hand, family size and gender have anegative effect loan repayment performance of the members But bookkeeping l iteracy is not significant. Specifically, older, more educated, married members,in certain occupat ions ,with higher monthly incomes are more likely to repay loans on time. Furthermore, member s with better budgeting, debt management, and saving literacy skills demonstrate higher odds of timely loan repayment. The study underscores the importance of enhancing financial literacy programs within SACCOs to improve loan repayment rates and ensure the sustainability of these cooperatives.The recommendations for Duroshalla should provide finance al for training, offer i ncentives for older members, promote education and skill development, consider marital status i n loan assessment, encourage income-generating activities, assist members with larger families in financial management, promote budgeting and debt management literacy programs, and encourage saving habits among members.
IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE AWARD OF THE DEGREE OF MASTERS OF ACCOUNTING AND FINANC
(HAWASSA UNIVERSITY, 2024-05) ELIAS PAWULOS (BSc
The purpose of this study is examining the Determinant of tax revenue in Ethiopia. And it uses time series regression analysis and quantitative research methods; study employs the autoregressive distributed lag (ARDL) error correction model (ECM) regression to analyze the relation between tax revenue and various economic factories in Ethiopia for the period 1992– 2022. The findings from the unit root tests revealed are stationary. The ARDL-bound tests confirmed the existence of a co-integration relationship among the variables. The Johansen co integration of long-run results showed a significant relationship between inflation, nominal GDP, and foreign direct investment. And the same variables are insignificant: trade openness, manufacturing, agriculture. And also the short-run results indicated a significant negative relationship between trade, nominal GDP, agriculture, and tax revenue. In the short run, foreign direct investment has no statistically significant short-run relationship with tax revenue. The diagnostic result show free serial correlation and hetroskedasticity whilst the model’s linearity assumption is supported by the RESET test result, validating the model’s suitability for analyzing variable relationships. The residuals of the model are normally distributed, affirming the model’s reliability in predicting tax revenue, and both the CUSUM and CUSUM squares stability tests indicate that the model is stable over time, reinforcing the dependability of the model’s prediction. The model demonstrates a highly good fit with an R-squared value. The error correction term is highly significant, confirming the existence of a long-run relationship among variables. The study provides valuable insights for policymakers to develop effective economic policies aimed at enhancing tax revenue generation while ensuring economic stability and growth in Ethiopia
ACCESING TECHNICAL EFFICIENCY AND PRODUCTIVITY GROWTH OF MEDIUM AND LARGE-SCALE MANUFACTURING INDUSTRIES IN ETHIOPIA
(HAWASSA UNIVERSITY, 2024-05) MERERTU BEKELE
The main objective of the study is to measure the technical efficiency and productivity of large and medium manufacturing industries. To compute efficiency score the study employed Constant Return to scale and Variable returning to scale using a dataset ranging from2016 to 2020 of 44 sub industries out of 79 to industries. A purposive sampling technique is used identify and sample industries with full dataset on all input and output variables. Additionally, a Malmquist productive index is performed examine total productivity growth. To do this the study used a panel data of 15 major groups of industries with data ranging from 2007 to 2020. Secondary data was the only source and obtained from Ethiopian Statistical Service. To measure technical efficiency score two models were use: Constant Return to scale and Variable return to scale models. Based on constant return to scale model, on average, the efficiency value of the sample industries was 25.92% from the year 2016 to 2020. This reveals on average about 74.18% of inputs were inappropriately utilized. Whereas the average technical score when variable return to score model assumed was 28.76%. In addition Malmquist index result shows the sector under study had showed productivity progress by 5.7% over the study periods. This finding will have implication for policy makers and industry managers in order to be efficient.
THE EFFECT OF CREDIT RISK MANAGEMENT ON PROFITABILITY OF SELECTED PRIVATE BANKS IN ETHIOPIA
(HAWASSA UNIVERSITY, 2024-05) TENAYE FANTU
The main objective of this study is to examine the effect of credit risk management on profitability of selected private banks in Ethiopia. The study purposely selected 14 private banks with 10 years dataset ranging from 2013 to 2022. In this study, credit risk is represented by three proxies namely: Nonperforming Loan Ratio (NPL), Loan Loss Provision (LLPR) and Loan to Deposit Ratio (LTR) and ROA and ROE as a measure of profitability. A quantitative approach with descriptive and explanatory design was applied to examine the underlying hypotheses. The dataset of the target banks was obtained from National Bank of Ethiopia. The results reveal that Non-performing loan and Loan loss provision have a negative and statistically significant effect on profitability while Liquidity ratio and bank size have a positive and statistically significant effect on profitability. However, the coefficient of tangibility ratio shows mixed and significant results on the two proxies (ROA &ROE) of profitability and statistically significant effect. The findings of the study has implication for bank managers, policy makers, regulatory body and practitioners in that it would give an important insight help do design a strategic plan. Future studies are suggested to be conducted in this research area by incorporating variables such as Macro-economic factors like: Exchange rate, political influence, etc.
THE EFFECT OF CAPITAL STRUCTURE ON FINANCIAL PERFORMANCE: EVIDENCE FROM METAL AND ENGINEERING INDUSTRY IN ADDIS ABEBA
(HAWASSA UNIVERSITY, 2024-05) ZINABU EJIGU
In Ethiopia, recently there are few capital structure studies that focused on determining firm specific and macro-economic factors responsible to affect capital structure decision; in these studies researchers include either profitability or performance of companies to understand whether it had an effect on capital structure selection but they ignored the reverse effect of capital structure on financial performance of companies. To understand this reverse effect this thesis analyzes the effects of capital structure and debt maturity choice on financial viii performance using audited financial statements collected from each 10 sampled companies of Addis abeba’s Metal and Engineering Industry for the time span of six years (2018 to 2023). The multivariate OLS regression result of the study indicates capital structure has a significant and positive effect on financial performance (measured by return on equity) of the Metal and Engineering Industry companies as it is measured by debt ratio; furthermore, short term debt ratio has significant whereas long term debt ratio has insignificant but both positive effect as the study examined if different level maturity of debt has a different effect on financial performance. Thus, the study concluded that data from Addis abeba’s metal and engineering industry companies support Tradeoff theories and despite to their significances no different effect in direction on financial performance was found caused by levels of debt maturity. On the other hand, asset tangibility as a controllable variable was found to have a significant and negative whereas company size and asset turnover were not. Finally, the study recommended that companies in Metal and Engineering industry should employ more debt in to their capital structure; however, the industry companies should give a through consideration to determine the optimal point to which they exhaustively take the benefits of debt; otherwise they will be exposed to bankruptcy risk due to excessive utilization of debt.
EFFECT OF FINANCIAL LITERACY ON LOAN REPAYMENT PERFOR MANCE OF MEMBERS IN THE CASE OF DURO SHALLA SACCOs UNION WEST ARSI ZONE, REGIONAL STATE, ETHIOPIA
(HAWASSA UNIVERSITY, 2024-05) DUGASA MEKONNEN MULETA
Financial literacy is the possession of knowledge, skills, and attitudes that enable an individual to use money effectively by making sound informed financial decisions.The main purpose of this study was to assess the effect of financial literacy on the loan repayment performance of members in the Duroshalla Saving and Credit Cooperatives Union in the Oromia regional state of Ethiopia. The resrachrer investigated the effect of variables of such as demographiccharacteri stics, socio economic related and financial literacy variables such as budget literacy, debt man agement literacy, and saving literacy debt management literacy, budgeting literacy, bookkeeping literacy,and saving literacy.The syudy employed both explanatory and descriptive survey reseach design with mixed approach also purposive sampling andsimple random sampling technique used .The collected data was analyzed using descriptive statistics and binary logistic regression additnally used (SPSS)version 26. The result of this study has shown that age, education level, occupation, marital status, budgeting literacy, debt management literacy, and saving literacy var iables have positive and significant effect on the loan repayment performance of the members of Duroshalla SACCOs Union in West Arsi Zone, Oromia, Ethiopia. On the other hand, family size and gender have anegative effect loan repayment performance of the members But bookkeeping l iteracy is not significant. Specifically, older, more educated, married members,in certain occupat ions ,with higher monthly incomes are more likely to repay loans on time. Furthermore, member s with better budgeting, debt management, and saving literacy skills demonstrate higher odds of timely loan repayment. The study underscores the importance of enhancing financial literacy programs within SACCOs to improve loan repayment rates and ensure the sustainability of these cooperatives.The recommendations for Duroshalla should provide finance al for training, offer i ncentives for older members, promote education and skill development, consider marital status i n loan assessment, encourage income-generating activities, assist members with larger families in financial management, promote budgeting and debt management literacy programs, and encourage saving habits among members.
THE EFFECT OF CREDIT RISK MANAGEMENT ON PROFITABILITY OF SELECTED PRIVATE BANKS IN ETHIOPIA
(Hawassa University, 2024-05) TENAYE FANTU
The main objective of this study is to examine the effect of credit risk management on profitability of selected private banks in Ethiopia. The study purposely selected 14 private banks with 10 years dataset ranging from 2013 to 2022. In this study, credit risk is represented by three proxies namely: Nonperforming Loan Ratio (NPL), Loan Loss Provision (LLPR) and Loan to Deposit Ratio (LTR) and ROA and ROE as a measure of profitability. A quantitative approach with descriptive and explanatory design was applied to examine the underlying hypotheses. The dataset of the target banks was obtained from National Bank of Ethiopia. The results reveal that Non-performing loan and Loan loss provision have a negative and statistically significant effect on profitability while Liquidity ratio and bank size have a positive and statistically significant effect on profitability. However, the coefficient of tangibility ratio shows mixed and significant results on the two proxies (ROA &ROE) of profitability and statistically significant effect. The findings of the study has implication for bank managers, policy makers, regulatory body and practitioners in that it would give an important insight help do design a strategic plan. Future studies are suggested to be conducted in this research area by incorporating variables such as Macro-economic factors like: Exchange rate, political influence, etc.