Determinants of Interest Rate Spread in Ethiopia

Financial intermediaries play a great role in economic development endeavors. Those intermediaries play their role under the umbrella of the central bank of a given nation with the principles of profitability, safety and liquidity. The more financial intermediary s liquid, the less they are profitable. To be more profitable, financial intermediaries are expected to be efficient. One way to measure or determine the efficiency of financial intermediaries is using interest rate spread the difference between average lending rate and average deposit rate. The higher the magnitude of the spread is the inefficient the intermediaries.

Autorentext

Temesgen Kebede, Lecture at DMU, joined Adama University in 2008/09 and graduated with M. Sc. in Development Economics on October 30, 2010. He is interested in conducting researches in areas of finance and economic development. Moreover, he has keen interest in institutions and economic growth; as the former has a matter for growth.