DIVERSIFICATION STRATEGIES AND COMPETITIVE ADVANTAGES OF BANKING SECTOR IN RWANDA CASE OF BANK OF KIGALI (2017-2022)
Abstract
This study examined the role of product diversification strategy and competitive advantage of banking sector in Rwanda; to identify the role of asset diversification strategy on competitive of Bank of Kigali; to evaluate the effect of technological diversification strategy on competitive advantage of Bank of Kigali and to assess the influence portfolio diversification strategy on competitive advantage of Bank of Kigali. The study was quantitative in nature and used a case study approach. The data was collected from 62 employees of Bank of Kigali. SPSS version 20 was applied to analyze primary data and trend percentage and ratio analysis was applied to analyze secondary data. The study revealed that Bank of Kigali had adopted financial assets diversification Bank of Kigali has adopted loans diversification; The bank has adopted cash and cash equivalent diversification; they strongly asserted that there has been adoption of asset diversification has lowered portfolio volatility and losses and they alleged that the quality of assets has improved financial performance of the bank. Regarding the effect of technology, the study revealed that there is use of internet banking which has exposed new there is marketing of new services that are technologically or commercially unrelated to current products the bank has adopted agency banking model the use of mobile banking has resulted to technological/ commercial synergies with current products. The extent to which the Bank of Kigali had been effective at applying technological based services towards its customers. Bank of Kigali was the first commercial bank in Rwanda that managed to expand mobile banking to several people as its numbers of customers increased significantly. All these achievements stand on the extension of mobile banking services through bank agency diversification as well as to increase the number of branches, sub branches and outlets. Bank of Kigali invests in dividend financial gains; the bank has invested in commercialism activities gains diversifies its investment in various options that are aligned to its business strategy to achieve a competitive advantage. The findings from the results indicated reflect the theories of finance as they opined that. Investment portfolio choice affects the financial performance of commercial banks whereby commercial banks should invest in real estates, bonds and mortgages to achieve a competitive advantage.
Key Words: Technological diversification, Portfolio diversification, Competitive advantage
CITATION: Kamagoba, S. & Irechukwu, E. N. (2023). Diversification strategies and competitive advantages of banking sector in Rwanda. Case of Bank of Kigali (2017-2022). The Strategic Journal of Business & Change Management, 10 (4), 1098 – 1113. http://dx.doi.org/10.61426/sjbcm.v10i4.2807
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DOI: http://dx.doi.org/10.61426/sjbcm.v10i4.2807
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