Assessing the Necessity for Capital Market Formation in Ethiopia: Evidence from Private Commercial Banks

Abstract

The study assessed the need for stock market formation in Ethiopia. To achieve the objective of the study, data were gathered from both primary sources as well as secondary sources. The mixed research approach was employed by researcher due to qualitative and quantitative nature of data. Non probability sampling technique was employed by researcher. Structured questionnaire and telephone interview were employed as tool of primary data collection. Based on the analysis of descriptive statistics, the finding of this study implied that Ethiopia needs the establishment of stock market for boosting economic development. Also, the results of this study showed that, poverty reduction goal of the country, increasing in the size and number of share companies, the increasing in number of experts, development in banking and other financial sector in a country, current economic development and growth, increase of foreign investment in the nation, inflow of nation’s citizens who were abroad and the nation’s foreign relations and policies were prospects for establishment of capital market in Ethiopia. So the researcher suggested the government of Ethiopia has to give attention for establishment of stock market in the country.