Abstract:
This study investigates the impact of customer retention strategies on the financial growth of I&M Bank Rwanda from 2013 to 2023. The research was guided by two main objectives: the general objective, which aimed to explore the influence of customer retention practices on the financial growth of Rwandan commercial banks case study of I&M Bank, and specific objectives, including the identification of customer retention strategies used by I&M Bank Rwanda, the assessment of the bank's growth level during the period of the study , and the evaluation of the relationship between these strategies and the bank's growth. The study employed a mixed-methods approach, combining quantitative and qualitative data collection techniques. Secondary data was gathered from the bank’s financial reports and industry publications, focusing on key metrics such as total assets, market capitalization, and the number of current accounts over the ten-year period. These data were used to calculate annual growth rates and market share percentages, providing a comprehensive analysis of the bank’s performance. Additionally, qualitative data was collected through interviews with 15 randomly selected employees, complemented by survey responses from a sample of 120 customers, drawn from a total population of 25,159. The findings reveal that I&M Bank Rwanda's market share, reflected by its total assets and market capitalization, exhibited notable fluctuations over the decade. Starting with a market share of 10.7% in 2014, the bank experienced steady growth, reaching 12.4% by 2017, followed by a decline to 10.2% from 2018 to 2019 due to competitive pressures. However, the bank demonstrated a robust recovery from 2020 onwards, achieving a market share of 17.4% by 2023. Concurrently, the number of current accounts increased from 14,075 in 2014 to 21,665 in 2023, highlighting the effectiveness of the bank's customer retention strategies. While the growth rates moderated in later years, the overall upward trend underscores the bank's success in retaining and attracting customers. The analysis suggests that while customer retention strategies have contributed to long-term customer satisfaction and growth, their immediate impact on profitability metrics such as Return on Equity (ROE) and Return on Assets (ROA) is mixed. The study underscores the need for continuous innovation and strategic focus to maintain and enhance market presence in a competitive banking environment. The findings provide valuable insights for I&M Bank Rwanda and other commercial banks aiming to strengthen their customer retention practices and drive sustainable financial growth.
