The Effect of Non-Peforming Loans Management on the Financial Performance of Commercial Banks in Rwanda: A Case Study of ECOBANK Rwanda

Jean Bosco Harelimana

Abstract


The study assessed the impact of Non-Performing Loans management on the financial performance of commercial Banks in Rwanda: a case study of ECOBANK Rwanda throughout the period from 2013 -2015. Qualitative and quantitative data were collected from the total population of 295 of employees of ECOBANK Rwanda where a sample of 170 of respondents was selected. The findings were summarized below in accordance of research objectives. Methods such as questionnaires, structured interview were used under this study. From the findings, the results confirmed there are many factors account for the incidence of non-performing loans in ECOBANK. The profit ratios performance of ECOBANK RWANDA from 2013 to 2015 indicated an increase from 2013 to 2014 where it came from on 9.24% to 14.92% of profit, while in 2014 to 2015 are characterized by increasing in profit from 14.92% to 15.18% of profit. There is an evidence of association between NPLs management and financial performance of ECOBANK Rwanda which was 0.741. ECOBANK Rwanda should look if it is necessary the participation of all stakeholders in the implementation of credits delivery principles. It should continue to do an improvement since NPLs management contributes 54.9% on financial performance at ECOBANK, they could reach even on 100.0% when improvement is done well at this commercial bank. 


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DOI: https://doi.org/10.5296/erm.v3i1.12188

Enterprise Risk Management  ISSN 1937-7916

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