Effect of Debt Recovery Practices on Operational Performance of Bank of Kigali, Rwanda

Mugabekazi Kevine
University of Kigali, Rwanda
https://orcid.org/0009-0008-3168-2151
Email: mkevine25@gmail.com

Abstract: The general objective of this study was to assess the effect of debt recovery practices on operational performance of Bank of Kigali in Rwanda. The population of this study was 143 people. The study used a census inquiry method instead of sampling, this decision is based on the small size of the target population. The statistical analysis of the collected data was computed by Statistical Package for Social Sciences (SPSS) Version 25. The R value of 0.916 indicates a strong relationship between the predictors and the operational performance of Bank of Kigali. The R Square value of 0.838 indicates that approximately 83.8% of the variability in the operational performance of Bank of Kigali can be explained by the predictors in the model. The unstandardized coefficients for the predictor variables show their effect on the operational performance of Bank of Kigali. Specifically, negotiation in debt recovery has a coefficient of (β= 0.521, t=9.969, p value=0.000), indicating a significant positive effect on operational performance. Engaging debt collection agencies has a coefficient of (β= 0.225, t=5.430, p value=0.000), also showing a significant positive effect. Debt legal action has a coefficient of (β= 0.283, t=6.648, p value=0.000), further indicating a significant positive effect. All these coefficients are statistically significant on operational performance of Bank of Kigali, as indicated by their associated Sig. values below 0.05. The study recommended that Bank of Kigali should enhance training programs for debt recovery officers to further improve their negotiation skills and maintain positive relationships with debtors.