The Effects of Deposits Mobilization on Financial Performance in Commercial Banks in Rwanda. A Case of Equity Bank Rwanda Limited (Published)
This study is about to establish the effects of deposit mobilization on the bank financial performance in commercial banks in Rwanda. A case study of Equity bank Rwanda limited. Deposits are an indispensable tool commercial banks use to enhance its profitability through advancing deposits mobilized to its customers in form of loans which make in return interest to commercial banks. The lending activity is made possible only if the banks can mobilize enough funds from their customers. Specific objectives of this study are to determine the effect of marketing strategies on the financial performance of commercial banks in Rwanda, to establish the effect of interest rate changes on the financial performance of commercial banks in Rwanda and to determine the effect of banking technology introduced on the financial performance of commercial banks in Rwanda. The target population for the study was the bank managers involved in deposit mobilization namely the marketing team and the branch management team in Equity bank Rwanda. The research used a census to study a population of 27 staff. The main source of data was the primary and secondary data. The documentary method, the questionnaire as research instruments were used to get the data needed for the research. Data were processed by use of descriptive statistics after editing have been done. The computer software SPSS version 20 was used as a device to accommodate analysis. Pearson and Spearman’s correlation analysis was used to test the nature of relationship. The findings indicated that majority of the respondents (85%) confirmed that the brand name of the Equity Bank is recognized in the public this has made able overcoming challenges mostly facing high competition with other banks. The marketing strategy used made the bank to increase in terms of customers and it has led to the increase in deposits over the years. The findings also indicated that a positive change in deposits interest rate affects the level of deposits received and later on the profitability of the bank. The study revealed that the introduction of innovative banking technology has led to the increase in deposits at a low cost as opposed to the usual way of getting deposits through term deposits and made financial services accessible in the unbanked people. This also made the ROA, ROE, net profit increasing due as the loans volume increases. The statistical correlation revealed that there is a positive relationship between deposits mobilization and financial performance of commercial banks in Rwanda, the case of Equity Bank. The study recommends the bank to develop other strategies towards marketing and mobilize more deposits as they are indispensable tools towards the profitability of the bank.
Keywords: Banking Technology, Commercial Bank, Deposit Interest Rate, Deposit Mobilization, Financial Performance, Marketing Strategies
The Effects of Board Characteristics on Microfinance Institutions’ Social Performance in Kenya (Published)
With the growing competition of globalization, strategic decision makers have been faced with the competing interests of external and internal stakeholders such as greater diversity in corporate governance, undertaking more investments in corporate social responsibility and maximizing financial performance. As a result, strategic decision makers today must not only increase their financial performance, but also satisfy the increasing expectations of customers, suppliers and society as a whole. The objective of this study was to examine the effects of the board characteristics on the social performance among Kenyan MFIs. It focused on the board size, board terms, board committees, director remuneration, multiple directorship, boards’ skills and experience and the independence of directors. This study adopted positivist approach, deductive approach and explanatory research design. Population of the study consisted of all the MFIs registered by the AMFI as at 31st March 2012. Data was analyzed using quantitative and qualitative methods. Qualitative data was analyzed to yield descriptive, Pearson linear correlation coefficient, one way ANOVA, linear multiple regression and inferential statistics. The major findings of the study are: that a significant negative relation exists between social performance and board size, director remuneration, independence of directors while multiple directorship, existence of board committees are positively related. Length of board terms has no effect on the social performance of an MFI. Overall, the results show that MFIs in Kenya can improve their Social performance by improving on their board composition in line with the Capital Markets Authority guidelines.
Keywords: Aggressiveness, Marketing Strategies, Product and Performance