The purpose of this research was to assess the banking sector in Rwanda and its enabling environment to attract other banks within East African community. The research was carried out in Kenya Commercial Bank and Equity bank with the following research objectives; examining the nature of Rwandan banking industry, identifying the environmental factors in Rwanda that are conducive for banking sector and assessing the strategies that Rwanda banking industry has used to attract other banks within East African community. The researcher reviewed literature related to previous studies carried out in areas related to the topic giving emphasis to the nature of banking industry in Rwanda, environmental factors conducive for environment, strategies used to attract foreign banks and the banking sector in Rwanda.
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The researcher used descriptive and analytical research while the study population was 126 employees and customers of the selected banks. The sample size of the research was 95 employees from the selected banks. The data collection tools were questionnaires and interview guide while analysis and interpretation of data was done using tables and figures. Data collected was analysed based on the frequencies and percentages of respondent’s views. The research found out that the banking sector in Rwanda is very good (60%), and 32% described it as good. Meaning that Rwandan banking sector is good enough to attract other commercial banks within East African community, the factors necessary for the attraction of foreign commercial banks within East African Community are security (20%), stable currency (16%), and nature of the banking industry (29%), a wide market (9%) and conducive environment, there is a relationship between banking environment and attraction of commercial banks in Rwanda (96%) meaning that attraction of commercial banks and banking environment are related. The research concluded that the nature of Rwanda the nature of the banking industry in Rwanda is good enough to attract other commercial banks within East African community and has favoured the foreign commercial banks that opened up in Rwanda from east African region and the environmental factors in Rwanda that are conducive for banking sector in Rwanda included security, stable currency and nature of the banking industry, a wide market and conducive environment. The research recommended that the government of the republic of Rwanda should continue ensuring that the banking environment is conducive by continued supervision and monitoring of the sectors, controlled inflation and stabilising the currency.
ATM : Automated Teller Machine CAMELS: Capital, Asset Quality, Management, Earnings, Liquidity, and Sensitivity CAR: Capital Adequacy Ratio EAC: East African Community EDPRS: Economic Development and Poverty Reduction Strategy FDI: Foreign Direct Investment FSDP: Financial Sector Development Program GDP: Gross Domestic Product IMF: International Monetary Fund KCB: Kenya Commercial Bank MBA: Master of Business Administration NBR: National Bank of Rwanda RDB: Rwanda Development Board Rwf: Rwandese Franc USA: United States of America
A bank is a financial institution that accepts deposits from and extends credit facilities to customers.
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