IMPACT OF LOAN PORTFOLIO MANAGEMENT STRATEGIES ON FINANCIAL PERFORMANCE OF COMMERCIAL BANKS IN RWANDA CASE OF I&M BANK PLC RWANDA (2019-2022)

Abstract

This research aims to bridge this critical gap by conducting an in-depth investigation into the impact of loan portfolio management strategies on the financial stability of I&M Bank PLC Rwanda from 2019 to 2022. The research used descriptive and correlational as methodology of the study. The data was collected from the employees of I&M Bank Rwanda Pls headquarters. The research used questionnaire and documentary as data collection techniques and analyzed through the mean, standard deviation and regression analysis. The SPSS v21 was used in data processing and analysis. The study focused on evaluating the impact of loan portfolio management strategies on the financial performance of I&M Bank Rwanda Plc. The regression analysis strengthened these correlations by quantifying the impact of each strategy on financial performance. The standardized coefficients (Beta) indicated the strength and direction of these relationships. Loan diversification (Beta = 0.050), credit risk management (Beta = 0.046), loan monitoring and reporting (Beta = 0.155), loan loss provision (Beta = 0.225), collection and recovery (Beta = 0.782), and diversification strategy (Beta = 0.632) all emerged as statistically significant predictors of financial performance.  In conclusion, the study's findings underscore the significance of effective loan portfolio management strategies in influencing the financial performance of I&M Bank Rwanda Plc. The positive correlations and regression results validate the effectiveness of the bank's current practices, providing actionable insights for optimizing strategies. This research contributes to the understanding of how specific loan portfolio management strategies impact the financial performance of I&M Bank Rwanda Plc. The statistically significant correlations and regression coefficients highlight the interconnected nature of these strategies and their substantial influence on the bank's overall financial health. These findings not only offer valuable insights for the bank but also contribute to the broader discourse on optimal loan portfolio management in the Rwandan banking sector.