Liquidity management policies: funding and investment approaches in Tanzanian baking sector.

Loading...
Thumbnail Image
Date
2011
Journal Title
Journal ISSN
Volume Title
Publisher
University of Dar es Salaam
Abstract
Striking a balance between profitability and liquidity risk appetite is one the most challenging issues to bank managers. The purpose of this study was to investigate liquidity management policy orientation in terms of funding and investment in Tanzanian banking sector. Another aim was to find out stability of liquidity management policies in both facets of the balance sheet over time. Both quantitative and qualitative methods were applied. Questionnaires were administered to six banks and such financial ratios as Liquid Asset to Total Assets and Total Demand Liabilities to Total Assets from the same banks were computed and treated in one way Analysis of Variance, Regression and Spearman Rank Order Correlation to arrive to conclusion. The study unveiled that liquidity management policies in term of funding and investment in Tanzanian banking sector are built on similar approaches. It was further found that policies under study are not stable overtime. The principal conclusion was that in the recent five years Tanzanian banks have been following relatively aggressive approach in both funding and investment. It was author’s recommendation that Bank of Tanzania has to set a substantial attention to banks liquidity risk management now than ever before as far as commercial banks are taking a more aggressive approach.
Description
Available in print form, East Africana Collection, Dr. Wilbert Chagula Library, Class mark (THS EAF HG1656.T34F86)
Keywords
Finance, Liquidity (Economics), Bank liquidity, Bank investments, Tanzania
Citation
ungamtama, W. (2011). Liquidity management policies: funding and investment approaches in Tanzanian baking sector. Master dissertation, University of Dar es Salaam.