EFFECT OF ICT INNOVATION ON MICROFINANCE PERFORMANCE TO RWANDA: A CASE STUDY AB BANK RWANDA PLC (2018-2021)
Abstract
The study aimed to assess the effect of ICT innovation on the microfinance performance to Rwanda. Specifically, the study was to assess determinants of ICT innovation in AB Bank Rwanda Plc, to analyze the indicators of Microfinance performance in AB Bank Plc before and after ICT innovation, and to identify the relationship between ICT innovation and microfinance performance in AB Bank Rwanda Plc. The study adopted a descriptive research design. The study population was 19 AB Bank Rwanda Plc, Gisozi main branch staffs and 1740 customers; a sample of 84 respondents was selected from staff and clients using purposive sampling and simple random sampling. Both primary and secondary data was used. Data were gathered using questionnaires and documentary review. Data was analyzed using descriptive statistics and presented by frequency tables and percentage. Pearson coefficient correlation (R) was used in the study to establish relationship that exists between variables. Findings shows that software and computerized accounting system (98.8%) and branch networking (89.3%) are the most used determinants of ICT innovation within AB Bank Rwanda Plc. The others determinants such as internet banking (79.8%), digital financial services (86.9%) are simply used also within AB Bank Rwanda Plc. From findings it showed that 73.7% of staffs, 89.2% of staffs confirmed respectively that portfolio quality and financial efficiency and productivity, and 100% of staffs confirmed that financial profitability and sustainability are the microfinance performance indicators. Results also show that profitability of indicators of bank are: Net profit margin, Return on assets (ROA), and Return on equity (ROE). Findings showed that 100 % of staff’s respondents consider strong positive relationship between ICT innovation and performance of AB Bank Plc. Results further showed that the coefficient of correlation (R=0.987) is greater than 0.5 and close to one. This indicates that there is a positive and strong relationship between ICT innovation and financial sustainability and profitability of AB Bank Plc. The study recommended that AB Bank PLC should upgrade technology to adjust to customer’s requirements by investing in development and equipping current facilities and technology with various purposes to familiarize to customers’ demands in its all clients are not satisfactorily informed about it.
Key words: ICT Innovation and Microfinance Performance
CITATION: Uwambajimana, F., & Mpakaniye, J. P. (2023). Effect of ICT innovation on microfinance performance to Rwanda: A case study AB Bank Rwanda PLC (2018-2021). The Strategic Journal of Business & Change Management, 11 (1), 12 – 36. http://dx.doi.org/10.61426/sjbcm.v11i1.2836
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DOI: http://dx.doi.org/10.61426/sjbcm.v11i1.2836
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