Determinants of interest rate spread in commercial banks: A case study of selected local and foreign banks in Tanzania
A research Dissertation submitted in Partial Fulfillment of the Requirements for Award of the Degree of Master of Science (Accounting and Finance -MSc. A&F) of Mzumbe University
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| Formato: | Thesis |
| Idioma: | en_US |
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Mzumbe University
2024
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| Acesso em linha: | https://scholar.mzumbe.ac.tz/handle/123456789/825 |
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| author | Aikoh, Kenedy Jeremiah |
| author_facet | Aikoh, Kenedy Jeremiah |
| author_sort | Aikoh, Kenedy Jeremiah |
| collection | DSpace |
| description | A research Dissertation submitted in Partial Fulfillment of the Requirements for Award of the Degree of Master of Science (Accounting and Finance -MSc. A&F) of Mzumbe University |
| format | Thesis |
| id | oai:41.59.85.69:123456789-825 |
| institution | Mzumbe University |
| language | en_US |
| publishDate | 2024 |
| publisher | Mzumbe University |
| record_format | dspace |
| spelling | oai:41.59.85.69:123456789-8252024-05-27T10:38:07Z Determinants of interest rate spread in commercial banks: A case study of selected local and foreign banks in Tanzania Aikoh, Kenedy Jeremiah Bank interest rate Commercial Banks Financial sector development Interest rate spreads Indigenous bank Loan Losses Non-interest income on-performing loans Inflation Rate Exchange Rate Volatility A research Dissertation submitted in Partial Fulfillment of the Requirements for Award of the Degree of Master of Science (Accounting and Finance -MSc. A&F) of Mzumbe University The behavior of interest rate spread in Tanzania for a very long period of time have been strong, high and persistently showing little signs of narrowing. When compared with other East African countries, interest rate spread in Tanzania seems to be the highest. It is this persistent and low narrowing trend of the interest rate spread which gave rise to the need of studying the factors which causes high interest rate spread in commercial banks in Tanzania. The overall objective of this study was to identify the Determinant of interest rate spread in commercial banks in Tanzania and comparing the interest rate spread between the selected banks. The determinants were ascertained from review of previous literatures. Related parameters from the selected determinants were studied for the chosen banks for the period between 2006 and 2012, a period after adoption of market determined interest rate regime. The study based on the secondary data from 28 quarters of published quarterly reports of the selected commercial banks and Bank of Tanzania quarterly economic bulletin publications. Multiple regressions were applied to establish relationship between the dependent variable, interest rate spread and the chosen independent variables which were non-interest income, provision for loan losses, non-performing loans, non-interest expenses, gross domestic product rate, treasury bills rate and inflation. The results from the study indicate that the key determinants of interest rate spread for the selected commercial banks are the treasury bills rate, TBillrate; Real GDP rate, Non-interest income, NII; Provision for loan losses, PLL and Non-performing loans, NPL. The results also show that the interest rate spread for the selected local commercial bank is higher than that of the selected foreign commercial bank. The policy implication from the study is that the high responsiveness of commercial banks spread to the treasury bills and real GDP rate needs to be regulated. This study can be extended by exploring the impact of financial sector development on interest rate spreads in commercial banking system. Private 2024-05-27T10:38:03Z 2024-05-27T10:38:03Z 2013 Thesis APA https://scholar.mzumbe.ac.tz/handle/123456789/825 en_US application/pdf Mzumbe University |
| spellingShingle | Bank interest rate Commercial Banks Financial sector development Interest rate spreads Indigenous bank Loan Losses Non-interest income on-performing loans Inflation Rate Exchange Rate Volatility Aikoh, Kenedy Jeremiah Determinants of interest rate spread in commercial banks: A case study of selected local and foreign banks in Tanzania |
| title | Determinants of interest rate spread in commercial banks: A case study of selected local and foreign banks in Tanzania |
| title_full | Determinants of interest rate spread in commercial banks: A case study of selected local and foreign banks in Tanzania |
| title_fullStr | Determinants of interest rate spread in commercial banks: A case study of selected local and foreign banks in Tanzania |
| title_full_unstemmed | Determinants of interest rate spread in commercial banks: A case study of selected local and foreign banks in Tanzania |
| title_short | Determinants of interest rate spread in commercial banks: A case study of selected local and foreign banks in Tanzania |
| title_sort | determinants of interest rate spread in commercial banks a case study of selected local and foreign banks in tanzania |
| topic | Bank interest rate Commercial Banks Financial sector development Interest rate spreads Indigenous bank Loan Losses Non-interest income on-performing loans Inflation Rate Exchange Rate Volatility |
| url | https://scholar.mzumbe.ac.tz/handle/123456789/825 |
| work_keys_str_mv | AT aikohkenedyjeremiah determinantsofinterestratespreadincommercialbanksacasestudyofselectedlocalandforeignbanksintanzania |