EFFECT OF AGENCY BANKING ON FINANCIAL PERFORMANCE OF COMMERCIAL BANKS IN RWANDA. A STUDY OF FOUR COMMERCIAL BANKS IN RWANDA
Journal Title: European Journal of Business and Social Sciences - Year 2016, Vol 5, Issue 1
Abstract
Until recently access to banks was not an easy thing for a common man in Rwanda as banking sector was majorly targeting working class and the middle class people with more disposable income. Since 2012, there have been significant improvements in the banking sector with the introduction of agency banking, an innovative delivery channel that seeks to bring access to financial services much closer to entrepreneurs in Rwanda (BNR 2015). This study sought to investigate the effect of agency banking on financial performance of commercial banks in Rwanda. The study adopted a descriptive research design. The target study sample comprised of the 4 commercial banks operating agency banking in Rwanda as at 31st December 2015 (BNR, 2015). Census approach was used to select 15 senior managers from each bank thus forming a sample size of 60 respondents who were used in this study The study used both primary and secondary data. Primary data was collected using structured questionnaires that were administered to the respondents. Data collected was analyzed through SPSS version 21. The study found that the move by the central bank to regulate agency banking had a positive influence on the financial performance of commercial banks in Rwanda. The study also found that low transaction cost through agency banking had a positive impact on the financial performance of commercial banks in Rwanda. The study revealed that financial services accessibility by customers through baking agencies had a positive impact on financial performance of commercial banks in Rwanda. The study found that increased market share had a positive effect on the financial performance of commercial banks with many banking institutions indicating that increased market share allowed a company to achieve greater scale in its operations which generally improved its profitability. Multiple regression models was used to analyze the data on financial performance. The ANOVA results for regression coefficient indicate that the significance of the F is 0.00 which is less than 0.05. This implies that there is a positive significant relationship the effect of agency banking and performance of commercial banks in Rwanda and that the model is a good fit for the data.
Authors and Affiliations
Peter Mwangi King’ang’ai| Jomo Kenyatta University of Agriculture and Technology, Kigali, Rwanda. Email: bmmaghanga@gmail.com, Prof Thomas Kigabo| Jomo Kenyatta University of Agriculture and Technology, Kigali, Rwanda. Email : kthomas@bnr.rw, Dr. Ephantus Kihonge| Jomo Kenyatta University of Agriculture and Technology, Juja Kenya Email: ekihonge@jkuat.ac.ke, Ms. Jacklinne Kibachia| Jomo Kenyatta University of Agriculture and Technology, Kigali, Rwanda. Email: jakkie.kibachia@gmail.com
Keywords
Related Articles
- EP ID EP10747
- DOI -
- Views 463
- Downloads 20
EFFECT OF MITIGATING CREDIT RISK ON PERFORMANCE OF COMMERCIAL BANKS IN KENYA: A CASE OF CHUKA TOWN
This paper aimed at investigating the effect of mitigating credit risk to the performance of commercial banks currently operating in Chuka Town in Tharaka Nithi County. The study was descriptive in nature. The study o...
ASSESSMENT OF WOMEN ECONOMIC EMPOWERMENT AS A PANACEA FOR SOCIAL CHANGE IN YAKURR LOCAL GOVERNMENT AREA
Many critique have raised the question why there is a wide gap between women and men participation in economic development and social change in our society. It is on this backdrop that this paper wishes to critically...
THE IMPACT OF ABOVE THE LINE PROMOTION TOOLS USED IN THE TELECOM SECTOR - A CASE STUDY OF RELIANCE COMMUNICATIONS IN WESTERN UTTAR PRADESH CIRCLE, INDIA
In 2006, Reliance Communications (RCOM) had commenced its operations in Western Uttar Pradesh (UP), India and it had to face serious competition from the leader, Bharati Airtel Limited. On the other hand, there was a...
ANALYSIS BASED ON WEB ANALYTICS: THE FOUR LEVELS OF INFORMATION
The tool of web analytics or web measurement is the name of the program that integrates various information about the navigation of users of a given site and presents that information in a relational format. This tool...
FINANCIAL SOUNDNESS MEASUREMENT AND TREND ANALYSIS OF COMMERCIAL BANKS IN BANGLADESH: AN OBSERVATION OF SELECTED BANKS
The financial sector is one of the most significant sectors for any country, especially if a country is a developing in nature. In such an environment, banking sector plays the vital role to strengthen the economic co...