Abstract:
Working capital is regarded as the lifeblood and nerve of a business concern, it is therefore
essential to accommodate the smooth operations of any organization, but Studies in working
capital management have provided inconclusive results. The objective of this study is to analyze
the contribution of working capital management on the financial performance of banking
institutions using Bank of Kigali. Research had the following objectives; To evaluate the working
capital management of Bank of Kigali, To identify the factors influencing the effectiveness of
working capital management in Bank of Kigali and To examine the relationship between working
capital management and financial performance of Bank of Kigali. with the following research
questions: How the working capital management influence the financial performance of Bank of
Kigali? How is the effectiveness of working capital management in BK? And to what extend is
the relationship between working capital management and financial performance in BK? with the
following hypothesis: H0: There is no relationship between working capital management and
financial performance in BK Rwanda. H1: There is relationship between working capital
management and financial performance in BK Rwanda. The study used descriptive research
design. The data collecting instrument that was used is a structured questionnaire developed by
the researcher but also interviews, particularly for this study. Descriptive statistics for instance,
frequency, percentages and cumulative frequency was utilized in analyzing quantitative data. The
findings of the study showed that the that the organization constantly showed outstanding increase
in its total assets over the course of the lengthy four-year examination period (2013-2016). This
continuous growing trend demonstrates the company's sound financial management and highlights
its capacity to meet its financial obligations while retaining a sizable asset base. The results from
the analysis revealed a strong positive relationship between The Table 11 offer a compelling
narrative of the bank's financial performance over the years, particularly in terms of key indicators
like Return on Assets and Return on Equity. The data indicates a subdued performance in both
2009 and 2013, With the best performance levels, particularly in ROA and ROE, 2015 stands out
as a notable year, continuing the uptrend into 2016. This emphasizes the complex link between
asset quality and financial performance.
