Commercial banks in economic development of SMEs. An analysis of their contribution

Inhaltsverzeichnis (Table of Contents)

• OPERATIONAL DEFINITION OF TERMS
• ABBREVIATIONS AND ACRONYMS
• ABSTRACT
• GENERAL INTRODUCTION
• INTRODUCTION
• PROBLEM STATEMENT
• OBJECTIVES OF THE STUDY
• GENERAL OBJECTIVES
• SPECIFIC OBJECTIVES
• RESEARCH QUESTIONS
• Hypothesis1
• Hypothesis 2
• Scope of Study
• Time Scope
• Geographical Scope
• Content Scope
• Significance of the Study
• To the researcher
• To owners and managers of KCB
• To the ULK Community
• To SMEs
• CHAPTER ONE: LITERATURE REVIEW
• Introduction
• Conceptual Review
• Commercial banks
• Bank
• Loan
• Small and medium enterprise
• Economic Development
• THEORETICAL REVIEW
• THEORIES OF COMMERCIAL BANKS
• HISTORY OF BANKING
• Origin of the word bank
• Types of banks
• Financial Services of commercial banks offered to SMEs
• Deposit and lending services
• Payment services
• Investment Services
• Corporate Credit Cards
• Bookkeeping
• Contribution of commercial banks in economic development of SMEs
• Theories of SMEs economic development
• Background of SMEs in Rwanda
• Enabling Policy Environment and Infrastructure
• Access to finance in Rwanda SMEs
• FACTORS AFFECTING THE ECONOMIC DEVELOPMENT OF SMES
• Innovation
• Management skills and actions
• Competition
• Government policies
• Work experience
• Market condition
• Inadequate education and skills
• Lack of credit
• Technological Change
• Scanty Markets Information
• Measuring the economic development of SMEs
• Economic Development Indicators in SMEs
• Capital growth
• Sales growth
• Employment growth
• Review Related Literature
• Conceptual framework
• CHAPTER TWO: METHODOLOGY
• Research design
• Population study
• Sample size and selection
• Types of the Data
• Data Collection Methods and Instruments
• Interview
• Questionnaire
• Reliability and validity
• Reliability
• Validity
• Documentary Review
• Data Analysis Technique
• CHAPTER THREE: PRESENTATION OF FINDINGS
• General Characteristics of the Respondents
• Response rate
• Demographics Analysis
• Age of Respondents
• Level of education
• Descriptive Analysis
• EFFECTIVENESS KCBR FINANCIAL SERVICES TO SMEs
• Types of Financial Services
• Saving and Deposit Services
• Training Services
• Criteria Required for SMES Loan in KCBR
• Size of Loans Amount Applied And Received By The SMEs In KCBR Nyabugogo Branch
• Evolution of loans applied and received by customers
• Contribution commercial banks in economic development of SMEs
• Sources of Funds for SMEs
• Shareholder’s equity
• Loans from Relatives and Friends
• Trade or Business-to-Business Credit from Suppliers:
• Loans or Business-to-Business Credit from Equipment Sellers
• Mortgage Loans
• Commercial Bank Loans
• Venture Capital Funding
• Financial performance of SMEs
• FINANCIAL PERFORMANCE OF SMEs BEFORE AND AFTER GETTING KCBR FINANCIAL SERVICES
• Increase of the capital
• Increase of the sales
• Increase of the profit
• Correlation Analysis
• Regression analysis before moderation
• SUMMARY OF FINDINGS
• CONCLUSIONS
• RECOMMENDATIONS OF THE STUDY
• REFERENCE

Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)

This study aims to examine the contribution of commercial banks in the economic development of Small and Medium Enterprises (SMEs) in Rwanda. The study focuses on the Kenya Commercial Bank (KCB) Rwanda Ltd., specifically their Nyabugogo branch, analyzing data from 2017 to 2019. The objective is to determine the effectiveness of financial services offered by KCB to SMEs and assess the bank's overall contribution to their economic development.

• The effectiveness of financial services provided by commercial banks, particularly loans, savings, insurance, and training programs, in supporting SME development.
• The role of commercial banks in providing access to finance and the challenges SMEs face in obtaining loans.
• The impact of commercial bank services on SME financial performance, including profitability, sales growth, and capital expansion.
• The relationship between commercial bank services and various economic development indicators for SMEs.
• The importance of government policies and infrastructure in supporting a conducive environment for SME growth.

Zusammenfassung der Kapitel (Chapter Summaries)

Chapter 1: Literature Review delves into the conceptual and theoretical frameworks surrounding commercial banks, SMEs, and economic development. The chapter explores the historical evolution of banking, various types of banks and their services, and the role of commercial banks in financial intermediation. It also examines the definition and characteristics of SMEs, including their importance to national economies. The chapter explores key factors influencing SME economic development, such as innovation, management skills, competition, government policies, and access to finance. It concludes by highlighting the specific challenges SMEs face in accessing credit and the need for a comprehensive understanding of their financial needs.

Chapter 2: Methodology outlines the research design, population, sample selection, and data collection and analysis methods employed in the study. The chapter provides a detailed explanation of the descriptive research design, the target population of SMEs, and the sampling technique used to select a representative sample. It further discusses the data collection methods, including questionnaires, interviews, and document review, as well as the measures taken to ensure reliability and validity of the research instruments.

Chapter 3: Presentation of Findings analyzes the collected data and presents the results in relation to the study's objectives. The chapter examines the effectiveness of KCB's financial services to SMEs, exploring the various types of services offered, the criteria used for loan approval, and the amounts of loans applied for and received. The chapter analyzes the contribution of commercial banks in the economic development of SMEs, focusing on the sources of funds for SMEs, their financial performance before and after accessing KCB services, and the impact of these services on key indicators like profitability, sales, and capital growth. Finally, the chapter presents the results of correlation and regression analyses, revealing the statistical significance of the relationship between commercial bank services and SME economic development.

Schlüsselwörter (Keywords)

This study focuses on the contribution of commercial banks in the economic development of SMEs in Rwanda. The key concepts explored include commercial banks, SMEs, economic development, financial performance, access to finance, loan services, savings services, insurance services, training services, government policies, infrastructure, and financial indicators.

Frequently Asked Questions

What is the focus of this study on Rwandan SMEs?

The study analyzes the contribution of commercial banks, specifically KCB Rwanda Ltd, to the economic development of Small and Medium Enterprises (SMEs) between 2017 and 2019.

Why do many SMEs in Rwanda fail according to the research?

Key factors for the high failure rate (up to 60% by year 4) include poor financial management and limited access to financial services due to collateral requirements and information asymmetry.

What financial services do commercial banks offer to SMEs?

Banks provide deposit and lending services, payment services, investment services, corporate credit cards, and training programs.

How is the economic development of an SME measured in this study?

Success is measured through indicators such as capital growth, sales growth, and employment growth.

What methodology was applied to gather data?

The study used a descriptive and explanatory research design, utilizing questionnaires for 105 sampled SMEs and analyzing data with SPSS software.

What were the main findings regarding banking services and SMEs?

The findings indicated that banking services are positively related to the economic development of SMEs and significantly improve their financial performance.