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Shylet Mufandaedza

Great Zimbabwe University,

Box 1235, Masvingo, Zimbabwe.

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CITATION: Mufandaedza, S. (2017) Determinants Of Commercial Bank Lending Behaviour In Zimbabwe: An Empirical Investigation Of The Post Dollarization Era (2009-2015). International Journal of Journal Economics and Finance. Vol. 6 (3) pp 1 - 13




The paper examines the lending behaviour of eleven Zimbabwe’s commercial banks for the period 2009-2015(post dollarization) to estimate a balanced random effect model. The main objective of the paper is to determine the determinants of commercial bank lending in post dollarization era. Lending has been highly skewed to the individuals which is mostly consumptive loans instead of manufacturing, mining, services and other sectors. Confidence in the banking sector was indicated by growing deposits, however the banks were sceptical in advancing loans especially the medium and long term nevertheless this was on the background of growing deposits (demand deposits and time deposits). The research found that, capital worthy, cash reserve required, non-performing loans and total deposits were statistically significant in explaining variations in the loan supply. However, GDP, inflation and return on assets were insignificant. Total deposits had a greater impact on volume of loans extended by commercial banks. Hence the research advises authorities that macroeconomic fundamentals need to accommodate strategies that encourage medium to long term deposits, so as to boost loans in all economic sectors.



Bank lending, deposits, post dollarization


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