Abstract:
The topic under this study is made of “to analyze the contribution of loans management on the financial performance of commercial banks in Rwanda. with the following objectives; To assess the effectiveness of loan management of EQUITY BANK RWANDA PLC, To analyze the how loans management contribute to the financial performance of EQUITY BANK RWANDA PLC The research was a descriptive survey which was utilized to conduct this investigation. This research is concerned of 32 employees selected in purposively in sample random sampling operating in different department of EQUITY BANK RWANDA PLC. In the table 4.14 shows that the Net Profit Margin ratio of Equity bank Rwanda PLC was 35.23%, 36.35%, 36.95%, and 37.40 respectively in 2019, 2020,2021 and 2022. for 100Rwf of sales a bank got 35.23 Rwf of benefit; in 2019, for 100Rwf of sales a bank got 36.35Rwf of benefit; in 2020, for 100Rwf of sales a bank got 36.95Rwf of benefit and in 2021 and for 100Rwf of sales a bank got 37.40Rwf of benefit; in 2022 From these results, the Equity bank Rwanda PLC was performing very well. The table 4.16 shows the return on equity is satisfactory; it was 19.96% in 2019, 22.19% in 2020 ,21.07% in 2021 and 18.90% in 2022, This means that, for the 100Rwf investors have put in a bank, they got 19.96Rwfof profit, in 2019, for the 100Rwf investors have put in a bank, they got 22.19Rwfof profit and in 2020; for the 100Rwf investors have invested in bank, they generated in 21.07Rwf of profit , in 2021 and for the 100Rwf investors have put in a bank, they got 18.90Rwf of profit in 2022 Therefore, the higher the return on equity ratio, the more stable a company is considered. Moreover, a higher return on equity indicates a company is using its owner's funds wisely to generate Profits. This shows that the profitability ratio was generally good, because all profitability ratios are positive during the period of the study assessed.
