Credit Management and Bank Performance of Selected Commercial Banks in Kigali- Rwanda

ABSTRACT 

This study was undertaken with the primary purpose of determining if there is a relationship between credit management and bank performance in selected commercial banks-Kigali Rwanda. To accomplish this task, it was guided by the following research questions; what is the profile of the respondents in terms of age, sex, level of education, position in the bank and number of years in present position? What is the extent of credit management in terms of credit appraisal and approval procedures, debt collection strategy and credit monitoring procedures? What is the level of bank performance in selected commercial banks in Kigali-Rwanda? Is there a significant relationship between credit management and bank performance in selected commercial banks in Kigali -Rwanda? The research was carried out using closed ended questionnaires based up on purposive samples of the banks in the target population (160). The data was analyzed using SPSS software package where frequencies, percentages, means and standard deviation were used. The findings showed that the extent of credit management was poor with the overall total of 2.40; the level of bank performance was also rated at 2.2 indicating a low performance. The findings reveal a significant relationship between credit management and bank performance. The study further revealed that there were some weaknesses in credit implementation which resulted into low performance in selected banks. However the banks were advised to adopt an aggressive credit management strategy in place to improve on the performance.

Tabile of Content

Chapter Page

ONE 1

THE PROBLEM AND ITS SCOPE 1

Background of the study 1

Problem statement 2

Purpose of the study 3

Research objectives 4

Research questions 4

Hypothesis 5

Scope of the study 5

Significance of the study 5

Operational objectives 6

TWO 8

REVIEW OF RELATED LITERATURE 8

Concepts, opinions, ideas from author/expert 8

Theoretical perspective 11

Related studies 12

THREE 19

METHODOLOGY 19

Research design 19

Research population 19

Sample size 19

Sampling procedure 20

Research instrument 20

Validity and reliability of the instrument 21

Data gathering procedures 22

Data analysis 22

Ethical considerations 23

Limitation of the study 24

FOUR 25

DATA PRESENTATION, ANALYSIS AND INTERPRETATION 25

Profile of the Respondents 25

Description of the extent of credit policy 26

Description of the level of bank performance 32

Relationship between credit management and bank performance 33

FIVE 36

FINDINGS, CONCLUSIONS AND RECOMMENDATIONS 36

Summary of the findings 36

Conclusions 37

Recommendations 38

Areas for further research 39

References 40

Appendices 41

Appendix A: Introductory letter xii

Appendix B: Transmittal letter xiii

Appendix III: Informed consent xiv

Appendix lv A xv

Appendix lv B xvi

Appendix lv C xvii

Appendix 1111: Research instrument xviii

Researcher’s Curriculum Vitae xix