Capital Market Investment Income and Performance of Commercial Banks in Kigali, Rwanda

ABSTRACT The study explored the relationship between capital market investment income and performance among commercial banks in Kigali, Rwanda. The study was based on three objectives that included determining the level of capital market investment income of commercial banks in Kigali, Rwanda, determining the extent of performance of commercial banks in Kigali, Rwanda and establishing the relationship between capital markets investment income and performance of sciected commercial banks in Kigali, Rwanda. Commercial banks indicated in form of performance, profitability levels, and level of sales among others. Under methodology the study used the quantitative research approach. This quantitative research approach consisted of a crosssectional research design and a descriptive correlation design. Cross-sectional design was used and the sample size of this study was 90 respondents who consisted of all the financial managers, accountants, and staff. The findings revealed that both performance and capital market cash income in the commercial banks where very low (mean1.70). It further found that there is a significant positive relationship between the two variable (r20.050, significance 0.034). The alternative hypothesis was therefore accepted and null hypothesis rejected. Conclusion was drawn that there was low level of capital investment incomes and performance of commercial banks that account for low level of performance. The study recommends that there should be massive sensitization of the capital market investment incomes to enhance better performance

TABLE OF CONTENTS

DECLARATION

APPROVAL

DEDICATION iii

ACKNOWLEDGEMENT iv

LIST OF TABLES Viii

LISTS OF ACRONYMS AND ABBREVIATIONS ix

ABSTRACT x

CHAPTER ONE 1

INTRODUCTION

1 .1 Background of the Study

1 .1 .1 Historical Perspective 1

1. I .2 Theoretical Perspective 2

1. 1 .3 Conceptual Perspective 2

1.1.4 Contextual Perspective 3

1 .2 Problem Statement 4

1.3 Purpose of the Study 5

1,4 Objectives of the Study 5

1 .5 Research Questions 5

1 .6 Research hypothesis 5

1.7 Scope 5

1.7.1 ~Geographical Scope 5

1.7.2 Content Scope 6

1 .8 Significance of the Study 6

ChAPTER TWO 7

LITERATURE REVIEW 7

2.0 Introduction 7

2.1 Theoretical Review 7

2.3 Conceptual review 8

2.3 The level of capital market investment income in commercial banks 8

2.4 The extent of performance of commercia! banks 14

2.5 The relationship between capital markets investment incomes and performance of

comn~iercial banks 1 6

V

2.8 Research gap .18

CHArTER THREE 19

METHODOLOGY 19

3.0 IntroductiOn 19

3.1 Research Design 19

3.2 Study Population

3.3 Sample Size 20

3.4 Sampling Techniques 20

3.5 Data Sources 21

3.5.1 Primary Data 21

3.6 Data Collection Methods 21

3.6.1 Questionnaires 21

3.7 Validity and Reliability 21

3.7.1 Validity 21

3.7.2 Reliability of the instruments 22

3.8 Data Collection Procedures 22

3.9 Data Analysis 23

3.10 Ethical Considerations 23

CHAPTER FOUR 24

DATA PRESENTATlON, INTERPRETATIONS AND ANALYSIS 24

4.0 Introduction 24

4.1 Background information of the respondents 24

4.2 Level of capital markets investment incomes in commercial banks in Kigali, Rwanda. 26

CHAPTER FIVE 32

DISCUSSION, CONCLUSION AND RECOMMENDATIONS 32

5.0 Introduction 32

5.1 Discussion of the findings 32

5.1.3 The level of capital market investment income in commercial banks in Kigali, Rwanda32

5.1.2 The extent of performance in commercial banks in Kigali, Rwanda 32

5.1.3 The relationship between capital markets investments income and performance of

commercial banks in Kigali, Rwanda 32

5.2 Conclusion 33

5.2.1 The level of capital market investment income in commercial banks in Kigali, Rwanda3.)

5.2.2 The extent of performance in commercial banks in Kigali, Rwanda 33

5.2.3 The relationship between capital markets investment income and performance of

commercial banks in Kigali, Rwanda 33

5.3 Recommendations

5.3.1 The level of capital market investment income in commercial banks in Kigali, Rwanda34

5.3.2 The extent of performance in commercial banks in Kigali, Rwanda 34

5.3.3 Relationship between capital markets investment incomes and perfbrmance in

commercial banks in Kigali Rwanda 34

5.4 Areas for Further Research 35

5.5 Limitations of the study 35

REFERENCES 36

APPENDIX I 42

TRANSMITTAL LETTER FOR THE RESPONDENTS 42

APPINDIX II 43

INFORMFD CONSENT

APPENDIX Ill 44

RESEARCII INSTRUMENT 44