An Investigation of Interest Rate in Tajik Commercial Banks

This report presents an investigation into the impact of interest rate variations on commercial banks in Tajikistan following the country's accession to the World Trade Organization (WTO). The study examines various aspects, including the influence of liberalization on lending rates, the factors affecting interest rate determination, and the role of inflation. Data analysis includes test/retest reliability, univariate, bivariate, and multivariate statistics, along with thematic analysis to explore key questions. The findings reveal insights into how commercial banks manage interest rates, the satisfaction of online services, and the importance of asset-liability management. The report also covers the outcomes of hypothesis testing, contributions to knowledge, recommendations, limitations, and suggestions for future research. The study uses descriptive statistics, ANOVA tests, T-tests, and Chi-square tests to analyze the data collected from professionals at commercial banks in Tajikistan, providing a comprehensive overview of the financial landscape and operational practices within the banking sector.

An investigation of variation and impact of
interest rate in commercial banks in
Tajikistan after accession to WTO

TABLE OF CONTENTS
CHAPTER 4: FINDINGS......................................................................................................................1
4.1 Introduction......................................................................................................................1
4.2 Data analysis.....................................................................................................................1
4.2.1 Test/ Retest Reliability.............................................................................................1
4.2.2 Univariate statistics...................................................................................................8
4.2.3 Bivariate Statistics..................................................................................................19
4.2.4 Multivariate Statistics.............................................................................................27
4.3 Themes...........................................................................................................................37
4.3.1 Theme 1: How does liberalization affect lending rate of the commercial bank lending rates? 37
4.3.2 Theme 2: Does your bank has any influences due to commercial bank lending rates? 38
4.3.3 Theme 3: The cost factors affect determination of lending rates in commercial banks in Tajikistan 40
4.3.4 Theme 4: The general factors are relevant with cost of loans................................41
4.3.5 Theme 5: Influence of the inflation rate of the nation on the central bank interest rate policy and lending rate of
commercial banks............................................................................................................41
4.4 Conclusion......................................................................................................................42
CHAPTER 5: FINDINGS AND DISCUSSION.......................................................................................44
5.1 Introduction....................................................................................................................44
5.2.........................................................................................................................................48
5.2.1: Satisfaction through online services provided by bank.........................................48
5.2.2 Theme 3: Securities with making transactional operations....................................52
5.2.3 Theme 4: Role of banks’ assets and liability management for addressing financial issues 54

5.2.4 Theme 5: Satisfaction through interest rate charges on borrowed money..............61
5.3 Conclusion......................................................................................................................66
CHAPTER 6: CONCLUSION, CONTRIBUTION AND RECOMMENDATIONS......................................69
6.1 Review of aim and objective..........................................................................................69
6.2 Outcome of hypothesis tested.......................................................................................70
6.3 Contribution to knowledge.............................................................................................72
6.3.1 Theoretical contribution..........................................................................................72
6.3.2 Empirical contribution............................................................................................73
6.3.3 Practical contribution..............................................................................................73
6.4 Recommendations..........................................................................................................74
6.5 Limitations recognised in research study.......................................................................77
6.6 Further study for future research..................................................................................77
6.7 Personal reflection..........................................................................................................78
REFERENCES..............................................................................................................................79
APPENDIX....................................................................................................................................82

CHAPTER 4: FINDINGS
4.1 Introduction
In this present chapter there have been examination and test of the data base which have been used by researcher to analyse the
research issues. Moreover, with aspect to make adequate ascertainment and analyse the changes or influences commercial banks have
as per changing interest rates and governmental regulation relevant with banking operations
To analyse the impacts of changes in lending rates which affects commercial bank’s operations and growth. However, in relation
with this, there will be determination of the main factors which are affecting commercial bank operations as well as interest rate
variation in Tajikistan. There has been development of various plans and operational variation which will help in making proper
ascertainment of the operations. In this process, there will be influences of various aspects and elements which have been used to
examine the factors such as Descriptive statistics, ANOVA tests, T-test, Chi square, etc. therefore, such tests and statistical analysis
will bring accurate information relevant with data base. In addition, as per analysing the appropriate outcomes, there will be
preparation of several questions and interview with professionals at commercial banks of Tajikistan which in turn will be useful for
making appropriate participation in this aspect.
4.2 Data analysis
4.2.1 Test/ Retest Reliability
In relation with analysing the relationship between the group of variables which are has to be considered by the researcher with
approach to have adequate ascertainment of the data base. Thus, in accordance with this, 5 industrial question are prepared solely and
not taken from any research paper or magazine. These questions will be asked to 150 employees at the commercial banks of
Tajikistan. Thus, this test will be helpful in analysing the reliability of information which have been used for the further tests and
analysis. In accordance with designed data set there have been implication of Cronbach’s Alpha coefficient over the 5 variables. Thus,
there have presented information as follows:
Case Processing Summary
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N %
Cases
Valid 150 100.0
Excludeda 0 .0
Total 150 100.0
a. Listwise deletion based on all variables in the
procedure.
Reliability Statistics
Cronbach's Alpha Cronbach's Alpha Based on Standardized Items N of Items
.305 .312 5
Interpretation: Cronbach alpha is the tool that is used to measure reliability of scale that is used to measure particular
variables. Commonly used scale is Likert scale and Cronbach alpha reflect whether by using this variable can be measured in better
way. In the present study Cronbach alpha value is 0.305 which means 30%. This reflect that scale that is used failed to measure
variable.
Descriptive
This method helps in bringing summary information about the variables which have been analysed to have accurate
ascertainment of various activities. There will be influences of various statistical elements such as mean, mode, median, standard
deviation and range, etc. Therefore, it represents the summary statistics of database that can be helpful in managing business
operations. Moreover, there will be analysis of various outcomes based on interest rate fluctuation and relevant changes in operations
of commercial banks in Tajikistan have been asked to professionals.
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Descriptive Statistics
N Minimum Maximum Mean Std. Deviation Variance
Does your bank facilitate the
appropriate interest rate in
deposits?
150 1 5 2.29 1.277 1.631
Are the online operations
performed by your bank is
quite satisfactory?
150 1 5 2.15 1.252 1.567
Do you feel safe while
making transactional
operations?
150 1 5 2.33 1.251 1.566
Is your banks asset liability
management units play main
role in addressing the issues?
150 1 5 2.48 1.283 1.647
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Do you believe that,
vulnerability of a credit
union’s financial condition
in adverse market
movements?
150 1 5 2.15 1.252 1.567
Valid N (listwise) 150
Interpretation:
Statistics revealed that most of banks are facilitating appropriate interest rate on deposits as value of statistics is (M = 2.29, SD
= 1.277). People are also quite satisfied with the online banking transaction facility that is provided by their bank in the Tajikistan as
indicated by the statistics (M = 2.15, SD = 1.252). People are also feeling safe while making banking transactions as indicated by the
value of the statistic (M = 2.33, SD = 1.251). Overall, it can be said that commercial banks in the mentioned nation in the past couple
of years make significant improvement in their technology base due to which people do not face any problem in the online
transactions and they are highly satisfied. Respondents believed that asset and liability management is the one of the main factor that
assist bank in paying due attention to address problems on time. This is indicated by the value of the statistics (M = 2.48, SD = 1.283).
Respondents also believed that adverse market movements are greatly affecting banks financial condition as reflected by the statistics
(M = 2.15, SD = 1.252.
In order to analyze results at more granular level detail discussion on obtained results is carried below.
Does your bank facilitate the appropriate interest rate in deposits?
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It has been asked to the professionals that their bank faciality the appropriate interest rates in deposits from commercial banks.
On the basis for above listed outcomes where 37.3% of professionals believes that there will be appropriate interest rates in deposits of
banks. Therefore, there are appropriate rates which have been awarded to consumers on their savings account and deposits they make
in banks. Moreover, due to such charging rates they will retain appropriate gains on such investments. Along with this, there are
various reviews from professionals on which majority are in favor. It can be said that, commercial banks in Tajikistan are charging
satisfactory interest rates on deposits. In accordance with pension scheme which have been offered by government to its employees on
the basis of their job and level of remuneration retained by them. There have been influences of government policy development
which in turn have negative and positive impacts over schemes and offered by banking industries. Thus, the motive of government in
bringing appropriate revenue gains to the citizens on the basis of their performed duties and jobs in a particular sector. It basically
depends on the level of operations performed by a bank as well as the number of consumers associated with banking activities. Thus,
it can be said that, governmental plans and policies are less affecting the banking sector in Tajikistan which are in turn have
facilitating proper wealth to society. It will be based on changing effective rates of interest among consumers in saving their implied
funds.
Are the online operations performed by your bank quite satisfactory?
By considering the online transactional activities performed by banks for soothing banking activities. Thus, it has been asked
to 150 professionals at commercial banks in Tajikistan based on satisfaction through making online operations. Hence, on which
majority of them have presented their reviews in favor. It states that, there are 41.35% of professionals are strongly agree with this
statement, 25.3% are agree, 16.75 are neutral while same percentage of individual are disagree this statement. As per analyzing the
variations in the outcome on which it can be said that, currently the banking operations has been enhanced in Tajikistan which are
bringing proper satisfaction. Moreover, in relation which such outcomes it can be said that, online transaction of money and financial
terms are comparatively secure. Thus, the confidentiality of data base is managed well in the commercial banks of Tajikistan. The
separate risks management system is needed to be existed in a banking industry. It helps in securing time as well as perfectly
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executing the business operations. It ensures addressing the issues with proper consideration of all causes and impacts. Currently this
technique has been presented by banks in making appropriate operational analysis and efficiency of the issues which in turn will be
useful and adhesive for attaining favorable banking operations. Obstacles are mainly relevant with transferring the funds as well as
confidentiality of data base in online operations. On the other side, as per considering the above analyzed outcomes on which it can be
said that, there are major positive reviews obtained from the professionals at commercial banks. Thus, with respect with this,
maximum positive reviews have been considered by the professionals which emphasized on the outcomes as there are satisfactory risk
management system in the organization.
Do you feel safe while making transactional operations?
It has been asked to the professionals regarding the securities of the transactional activities they perform in the banking
operations make them feel safe. Thus. On which various reviews had been gathered by the researchers. on which it can be said that
there are 33.3% professionals are strongly agree with the statements, 26.7% are only agree while 20% are neutral at this approach.
Majority of opinion are in favour of this statement on which it can be said that, they are well confident in terms of having appropriate
analysis over the data base and appropriate determination of practices. In this case it can be said that the banking firms has to be more
focused in terms of improving security at transactional level. The details relevant with accounts, amount as well as destination needed
to be kept confidential as it will not affect the wealth of any individual. Thus, the inter-banking operations has been analysed and
determined by the researcher on which banks lend money to each other with a fixed interest rate to be charges. It helps them in
operating activities as well as improving banking functions in the environment. In analysing the outcomes there are approx. However,
it has been analysed that the borrowing interest rates are needed to be reformulated which will bring the positive rise to the income
generation as well as operational performance of the bank. There will be development of various policies and changes in activities
which can make suitable development in the operational practices. It creates opportunities to banking firms in terms of retaining
appropriate amount of revenue as well as make proper changes in operations.
Is your bank’s asset liability management units play main role in addressing the issues?
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On the basis of above listed analysis on which it has been asked to the professionals ate commercial banks of Tajikistan that,
their banks is capable of facilitating adequate asset-liability management is addressing the financial issues. Thus, the question arises
after considering the issues in the operations which have been faced by society after impacts of global financial crisis. Professionals
have presented the views on which large number of reviews are in favour which states theta their bank is capable of facilitating the
most adequate services to them. Main role of asset-liability department is mainly associated with facilitating the institution a strength
in terms of meeting debt challenges in the environment. There can be rise in operational gains and business motive which will help in
meeting the targets at the right time. Moreover, the commercial banks in Tajikistan are having the most convenient and appropriate
asset liability management. In relation with making additional gains banks usually offer term deposits. It is based on different rates for
several terms of borrowed amount. There will be revenue generation and adequate increment in the profitability of the banking sector
in Tajikistan. The long-term loans will have less rates while short period loans have higher interest rates. On a psychological manner it
can be said that, there are higher number of short term loan borrowers stated in the market. They usually take loans for specific task
such as purchasing home, vehicle and education. These loans are basically for a short period of time and that helps banks in retaining
higher gains. In relation with above listed analysis there are various favourable outcomes have been addressed by the researchers.
Professionals at commercial bank represented that, majority of them are charging rates with respect to variations in terms and time of
industry. Thus, again there are positive reviews from banks that they are adopting such techniques which will benefit them in getting
higher revenue through banking operations.
Do you believe that vulnerability of a credit union’s financial condition is same in adverse market movements?
In analysing influences of credit union are in context with helping each other fin the financial operations. they facilitate loans
or borrowing services to each other which in turn provides appropriate operational gains on lower interest rates. Thus, there have been
influences of various conditions which destructs such as adverse market condition like GFC, inflation or recession. In analysing such
outcomes, it can be said that, such factors will affect economy and which results changes in interest rates. On the other side, the above
listed analysis represents that there are 41.3% strongly believes that credit union’s financial condition fluctuates as per the changes
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incurred in market conditions. Therefore, it can be said that, to retain higher profits and securing capital funds in business. Moreover,
such variations had been done in accordance with making changes in the operational activities and business activities which has have
lead the organisation in retaining higher returns. Thus, these factors influence interest rates risk of such industries in a way of reducing
the level of sales and operational activities performed by them. There are various obstacles and issues which are affecting operations
of firm that helps in managing certain activities for adequate operational analysis. Therefore, these are the banking operations which
are needed to be considered seriously and administratively which will bring certain changes in the operations of the firm and that will
help them in making adequate operational changes.
Therefore, in this respect there are various strategic operations and decisions have been made by the banking professionals
which allows them in meeting the obstacles. Addressing such issues will be beneficial in retaining higher amount of profits through
operations as well as gathering large number of consumers. In formal process there will be analysis based on making proper auditing
of all accounts and analysis over causes which have affected the operational practices of banking firm.
4.2.2 Univariate statistics
This is the concept which will help in analysing the types of data and observations that argue to single attribute or characteristic.
However, analysing the univariate data on which researcher have denoted the independent variable as interest rates and dependent
variable as revenue in banking industries. In addition, there will be use of various data base which will be analysed, collected and
measured for accurate data analysis.
Hypothesis:
Null hypothesis: There is no mean significant difference between interest rates and revenue of commercial banks in Tajikistan
Alternative Hypothesis: There is a mean significant difference between interest rates and revenue of commercial banks in
Tajikistan
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Univariate Analysis of Variance
Descriptive Statistics
Dependent Variable: Does your bank facilitate the appropriate interest rate in deposits?
Mean Std.
Deviation
N
2.29 1.277 150
Mean value is 2.29 which means that sample respondents are agree on the fact that bank is facilitating appropriate interest rate on the
deposits.
Tests of Between-Subjects Effects
Dependent Variable: Does your bank facilitate the appropriate interest rate in deposits?
Source Type III Sum
of Squares
df Mean
Square
F Sig.
Corrected
Model .000a 0 . . .
Intercept 788.907 1 788.907 483.547 .000
Error 243.093 149 1.631
Total 1032.000 150
Corrected Total 243.093 149
a. R Squared = .000 (Adjusted R Squared = .000)
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