Abstract:
The study sought to examine the effect of electronic banking on performance of commercial
banks in Rwanda. It was specifically conducted in bank of Kigali with following those
specific objectives: to identify electronic banking tools used by bank of Kigali , to analyze
performance of bank of Kigali.To achieve the above stated objectives, the study has collected
data through primary and secondary sources. Data were conducted from 60 respondents who
are actually the employees and clients of BK who were selected using purposive sampling.
The results showed that BK uses telephone banking, internet banking ,electronic cards such
Visa cards, and ATM cards for different financial services, including cash deposit, cash
withdrawal, and account enquiries among others and 100% confirmed that BK uses mobile
banking as a system that allows its customers to conduct financial transactions remotely using
mobile phones.
The results also showed that 100% accepted that this new banking technology helps the bank
deliver financial services to the customers at a lower cost as clients no longer queue up for
financial services because they use ATMs and get the same easy and rapid services, saving
time and money. The results also showed that the electronic banking system helps to satisfy
customers by quickly getting information from the bank about their accounts and accessing
rapid financial services. The availability of a electronic banking system has also enabled the
bank to provide services to customers at remote distances, enabling the bank to gain more
clientele from the outreach services. The results have shown that BK's financial performance
is stable, as indicated by the evolution of customer ratio analysis. Non-interest income totaled
FRw 59.0 billion, an increase of 34.8% Y- o-Y(refer to year-on-year change on the Frw
values. Total operating income increased by 23.6% to FRw 224.4 billion, while total
operating expenses rose by 15.8% to FRw 96.0 billion. Loan loss provision stood at FRw
22.2 billion as at YE 2023, from FRw 13.1 billion in 2022. The correlation was equal to
0.851, meaning there is a positive high correlation between electronic banking and the
financial performance of BK. Therefore, all hypotheses were verified, and all objectives were
achieved. Finally, recommendations were formulated depending on the findings.
