THE EFFECT OF FINANCIAL LITERACY ON BUSINESS PERFORMANCE IN RWANDA A CASE OF BANK OF KIGALI RUBAVU BRANCH (2021-2023)

Abstract

The objective of the study were to assess the extent to which financial literacy influence the decision making process within BK and how this influence the performance of BK Rubavu and to demonstrate how the level of financial literacy among business owners/ manager correlate with key indicator of Bank of Kigali performance such as profitability, growth rate and return on investment. Literature review was guided by research objectives. The research design was descriptive. The total population were 50 employees but the study use 33 as sample size. Tools for collecting data were questionnaires and interview. Data was analyzed using tables, frequencies and percentages. Findings were in line with Objectives, objective one was looking at the extent to which financial literacy influence the decision making process within BK, the majority of respondents confirmed that financial literacy influence the decision making process within BK to a very great extent, objective two was looking at the influence of financial literacy to the performance of BK Rubavu, the majority of respondents confirmed that Financial literacy influence the performance of BK Rubavu Through Rising greater competition, innovation and quality products, market discipline, risk management, overcoming indebtedness and objective three was looking at how employees of BK Rubavu understanding of financial statements and financial ratios, the majority of respondents understand excellently financial statements and financial ratios. The study concluded that financial literacy has a significant influence on business performance. Investigations determined that financial literacy enables entrepreneurs to avoid business failures triggered by poor financial decision making. Studies have also confirmed that financial literacy influence the performance of the business enterprise. However, financial literacy exposes the entrepreneurial business owner to better decision-making skills which lead to higher business performance.The study recommends that, Technology should be used to Improving financial literacy as Technology enabled solutions such as online platforms, mobile applications, and other tools help clarify financial ideas and increase their accessibility to a larger audience.