Analyzing the Impact of Electronic Banking on Financial Performance: A Case Study of BPR Rwanda PLC

Abstract

This study analyzes the impact of electronic banking on the financial performance of commercial banks in Rwanda, focusing on Bank Populaire du Rwanda (BPR) from 2019 to 2022. The objectives include identifying forms of electronic banking utilized by BPR, assessing the bank’s financial performance, and examining the relationship between electronic banking and financial performance. A mixed methods research design was employed, using purposive and universal sampling techniques to gather data. Data collection involved questionnaires addressed to 16 BPR employees, interviews, and document reviews. Descriptive analysis (mean and standard deviation) and multiple linear regression were applied to test hypotheses. The findings revealed that BPR implemented various e-banking forms: electronic cards (mean: 3.75), ATMs (3.69), mobile banking (3.95), internet banking (3.89), and fund transfers (3.59). Regarding financial performance, return on assets showed fluctuations: 1.21% in 2019, declining to 0.94% in 2020, then rising to 1.74% in 2021, and reaching 2.98% in 2022. Return on equity followed a similar trend, with values of 9.3%, 7.97%, 11.83%, and 18.56% over the same period. Other metrics, like net interest margin and current ratio, also indicated variations in performance. The ANOVA results confirmed a significant relationship between electronic banking and financial performance, with a p-value of 0.000. The study concludes that e-banking positively impacts BPR's financial performance. Recommendations include improving ATM services, enhancing e-money transfer benefits, and ensuring financial solvency to sustain performance through effective e-banking practices