• Jesca Mukabarisa
• Gitahi Njenga

The research evaluated the impact of loan portfolio management on the financial performance of NCBA Rwanda. It concentrated on credit risk management, loan oversight and evaluation, and loan diversification. The study used Modern Portfolio Theory, Credit Risk Theory, and Agency Theory as its theoretical foundation. Both quantitative and qualitative methodologies were used, with a target population of 61 individuals. A census approach was adopted, resulting in 59 participants responding to the questionnaires sent to the 61 individuals. Statistical analysis was conducted using SPSS version 26, while theme analysis was used for qualitative data. The results, shown in tables, graphs, and narratives, used a mixed-methods approach that was triangulated for clarity, utilizing regression, correlation, and document analysis for further context. The analysis indicated that 85% of the differences in financial performance were attributable to successful loan portfolio management (ANOVA F-value = 480.734, p = .000). Credit risk management markedly impacted financial performance (B = .090, SE = .045, Beta = .103, t = 1.999, p = .047), with loan monitoring exerting the most substantial influence (B = .709, SE = .055, Beta = .624, t = 12.928, p = .000), succeeded by loan diversification (B = .499, SE = .089, Beta = .288, t = 5.576, p = .000). The Pearson correlation coefficients for credit risk management, loan monitoring, and loan diversification were 0.850**, 0.844**, and 0.861**, respectively (p < 0.000, N = 59). Participants concurred that credit scoring systems accurately forecasted defaults (mean = 4.17, SD = 0.72), collateral prerequisites were essential (mean = 4.29, SD = 0.67), and the credit approval procedure enhanced financial stability (mean = 4.14, SD = 0.66). Loan monitoring decreased non-performing loans (mean = 4.09, SD = 0.63), although loan reviews enhanced portfolio quality (mean = 4.10, SD = 0.56). Loan diversification alleviated risks (mean = 4.16, SD = 0.66), improved financial stability (mean = 4.15, SD = 0.61), and reduced risk concentration (mean = 4.17, SD = 0.62). The research validated that well executed loan portfolio management, including credit risk management, oversight, and diversification, favorably influenced financial performance. This study's conclusions are pertinent to enhancing financial performance in the banking industry, especially via efficient loan portfolio management. The notion of risk diversification was substantiated, showing that distributing risks among industries, geographies, and products aids in alleviating possible losses and securing financial stability. In light of these results, it is advisable for NCBA Rwanda and other banks to improve their credit risk management systems, use automated monitoring technologies, and emphasize loan diversification techniques to reduce defaults and stabilize revenues. Future study should investigate the long-term impacts of automated loan monitoring and the relevance of risk diversification across various financial sectors, including microfinance and fintech, while accounting for external variables such as regulatory alterations and economic volatility. These insights would enhance the flexibility and resilience of loan portfolio management in a changing financial environment. This research is pertinent for several players in Rwanda's banking industry. Commercial banks such as NCBA Rwanda get insights to improve risk management, profitability, and competitiveness. Policymakers want to acquire expertise to formulate improved policies that ensure industrial stability. Academics seek to use empirical research to enhance financial management understanding

Loan, Portfolio, Management Financial Performance, NCBA

"Loan Portfolio Management and Financial Performance of NCBA Rwanda", International Journal of Emerging Technologies and Innovative Research (www.jetir.org), ISSN:2349-5162, Vol.11, Issue 11, page no.h599-h664, November-2024, Available :http://www.jetir.org/papers/JETIRTHE2159.pdf

"Loan Portfolio Management and Financial Performance of NCBA Rwanda", International Journal of Emerging Technologies and Innovative Research (www.jetir.org | UGC and issn Approved), ISSN:2349-5162, Vol.11, Issue 11, page no. pph599-h664, November-2024, Available at : http://www.jetir.org/papers/JETIRTHE2159.pdf