Abstract:
The study was to The main objective of this study is to assess the contribution of loan management to the financial institution in Rwanda.
The specific objectives of the study were To analyze the effectiveness of loan management in Equity Bank Rwanda PLC. To determine the contribution of loan management to the performance of Equity Bank Rwanda PLC.
We have investigated using documentary techniques. From the table, interest expenses to interest income ratio of Equity Bank Rwanda PLC were ; 2019 the net profit margin was 24.8%, the net profit margin was 71.2%in 2020, in 2021 the net profit margin was 66.6 and 40.3 in 2022This good and positive ratio was mainly due to the increase of savings accounts and better management of credits that generated income.
These ratios reflect a better return on average assets ratios indicate efficient management of Equity Bank Rwanda PLC converted assets into net incomes. The above table indicate that ratios was in 2019 the ratio was increased 3.3% , in 2020 the ROA was 2.9% , in 2021 the ROA was increased up to 6.1% and in 2022 the ROA was increased up 7.3%. This ratio is an indicator used to evaluate the profitability of the assets of a firm. Putting it simple, this return on average assets indicates what a company can do with what it possesses. Generally, it is used by companies, banks and other financial institutions as an appraisal for determining their performance. Being calculated at period ends, i.e. quarters, years etc., the return on average assets does not reveal all the highs and lows. It is, rather, just an average of the period.
The profitability of Equity Bank Rwanda PLC, in terms of return on equity was 2019 it increased to 22.04% caused by the increase of equity shareholders , in 2020 was also increased to 19.4% , the ROE was 43.1% in 2021 and in 2022 was increased to 63.7 % as resulting an increase of the net income. Return on equity (ROE) measure of bank profitability, in which the denominator, shareholders' equity, is changed to average shareholders' equity. Typically, return on average equity refers to a company's performance over a fiscal year
