Banking development and economic growth in Rwanda

This study was formulated with the main objective of establishing the influence of Financial Depth on financial performance of commercial banks in Rwanda. In this paper financial depth was proxied by Broad money and credit to private sector, financial performance proxied by return on Assets (ROA), and both moderated by inflation proxied by consumer price index. This study collected and analysed both primary and secondary data. The study concluded that financial depth has a positive and significant influence on financial performance of commercial banks in Rwanda. Broad money and inflation also had significant influence on ROA, and therefore the study recommends that unless bank profitability depends on whether inflation expectations are fully anticipated. The study recommends that commercial banks in Rwanda need to reduce problem assets as high nonperforming loans dampen banks' potential lending capacity and, by extension, their ability to build up capital buffers. This book will give an insight to Rwandas strive to economic growth. It will be evident from this book that Rwanda has and takes successfull economic strides to achieve its vision.