Abyssinia Bank - Demand Evaluation Model

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Loan and advances by economic sector

2-Derived demand

The Bank has to take advantage of the opportunity that will come up on the way through minimizing the possible adverse effects resulting from potential threat. Meanwhile, the bank needs to shift its landscape by revising its existing business system /model and look for ways of repositioning itself with in the changing business environment to compete with other local and regional operators and ultimately emerge victorious.

The demand in the bank industry is directly related with the final consumer that is direct demand. It plays a vital role for the initiation derived demand. In the case of Abyssinia Bank the source of all demand is consumer market that is direct demand so the management must take appropriate action for both corporate and individual marketing system.

3-Complementary products

3.1. International banking system

In order to get international banking system the customer must have at least one account in the bank. Without this prerequisite the customer does not get international banking service for importers that pay the hard currency directly to foreign supplier through City Bank and other foreign banks.

When compared with that of the preceding fiscal year, all source of foreign currency showed a growth by birr 446.50 million, Birr 588.86 million, Birr 4.65 million, Birr 1.67 million and Birr 1.80 million from incoming transfer, export, money transfer, export, money transfer services, dealing and interest on correspondent bank, respectively.

3.2- Loans and Advances

Like international bank services Loans and Advances the customer must have an account to get the service. So this is complementary service in the bank industry because one service is highly dependent on another service.

The distribution of loans and advances by economic sectors depicted that domestic trade, export, import, construction and industry have registered an absolute growth of birr 299 million (13.3%), birr 228 million (23.3%), Birr 93 million (13.6%), Birr 75 million (9.1%) and Birr 64 million (26%) from the preceding period, respectively. In addition, transport and agriculture sector also registered a growth OF Birr 23 million in that respective order.

4-Direct substitutes

4.1. Local money transfer

in the bank industry there are some kinds of indirect substitute services such as if an individual does not have an account with in the bank he/she get the service with local money transfer, therefore, the need and wants of individuals directly substitute and easily get the service from the bank.

4.2. ATM

An individual can substitute directly the service from personal teller to automated teller that gives to the individual various alternatives to satisfy his wants easily.

5-Company product(s):

- Deposit

The major function of the bank is mobilizing deposit from different companies and individuals. It also divided in to three and total deposit in million birr.

- Demand

2013/14-1852

2014/15-2570

- Savings

2013/14-6401

2014/15-7654

- Fixed time

2013/14-843

2014/15-894

- Loans and Advances

Like deposit loan and advances also divided in three (3)

- Term Loans

2013/14-3870

2014/15-3988

- Over draft

2013/14-747

2014/15-1346

- Advances

2013/14-536

2014/15-662

- International banking services

The bank has so far established business relationship with eight Money Transfer Companies relationships with three of them (Money Gram, Ezremit AND kaah).

In addition, license has been secured from Master Card and its implementation is undergoing. On the other hand, correspondence is well underway to forge business ties visa card international.

6-Company objective

The objectives of the Bank of Abyssinia (BOA) are to live up to this legacy through continuous innovation and provision of world class banking services and became leader in the market in the competitive industry.

7-Internal company constraints

The bank of Abyssinia during its years of existence has been growing steadily and expanding in its scale of operation in almost all measuring parameters. This has been achieved through applying different means of enhancing customer-focused banking service.

So, all the activities executed during the current fiscal year focused on creating conducive situations for our esteemed customers. However, the company has different internal constraints such as

- Skilled man power specially in IT

- Employees promoted through service years not in merit base.

- Shortage of hard currency that satisfy the needs of importers

- Lack of coordination among departments that is vertical as well as horizontal coordination.

8-Evaluation of tasks and objectives

In its pursuit of getting closer to its customers, the bank has extended its outreach in different part of the country. To this end, the number of branches reached 132, showing a rise by 32 from the corresponding period last year.

Meanwhile, during the stated period the bank exerted unreserved effort to scale up its customers base and the resource it mobilizes. To this effect, the amount of deposit mobilized stood at Birr 11.12 billion surpassing the previous