Browsing by Author "Stephen, Novati"

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    Assessment of determinants of interest rate spread in commercial banks: the case study of commercial banks operating in Dar es Salaam
    (University of Dar es Salaam, 2010) Stephen, Novati
    Interest rate spread of the Tanzania’s Commercial banking industry had been on the rise for the last few years. The persistent increase in spread discourages savings and investments besides this casts doubt on the effectiveness of bank lending channel of monetary policy. Given the implications of raise in spread, this study examines the determinants of interest rate spread. The main objective of this study was to assess the determinants of interest rate spread among Commercial Banks in Tanzania, case study of 10 (ten) banks operating in Dar es Salaam. Research data were collected through use of structured interview guide and submitted to the respondents who were ready to provide information on this research in advance. Study findings reveal that interest rate spreads remain generally high in Commercial banks due to various determinants as reported by the respondents during interview; To mention the few, they include Administrative liquidity risks, policy rates/ central bank rates, Inflation, Profit margins, Costs of funds, Country risks, are some of the significant factors rated to be the factors of interest rate spread in Tanzania Commercial Banks. Lastly, It was recommended that Commercial banks can increase their operational efficiency and realize cost saving through technological change which allow banks to reduce costs by substituting physical capital for labour. Commercial banks can also achieve cost savings by offering a broader array of deposit and investment products such as money market accounts, mutual funds and securities underwriting.