EFFECTS OF TRANSPARENCY & DISCLOSURES ON THE FINANCIAL PERFORMANCE OF COMMERCIAL BANKS IN RWANDA

Commercial banks in Rwanda are facing an imminent crash due to high default rates thus affecting their financial performance; a situation that prompted to this study. The main objective of the study determined the effects of Transparency & Disclosures on the financial performance of Commercial banks in Rwanda. The study adopted a descriptive research design. The target population of the study was all the 14 commercial banks in Rwanda. Secondary data from publications, CRBs, journals and financial records was used. Primary data was collected using structured questionnaires which had both close ended and open ended questionnaires. The study was conducted various tests including normality test, multicollinearity, stationarity, heteroscedasticity and autocorrelation tests. The research instrument was a questionnaire. Data analysis was done with the aid of SPSS version 21.0. It was revealed that a unit increase on Transparency & Disclosures would lead to increase in financial performance by a factor of 0.016. Based on the regression equation provided, it states that a unit increase in Transparency & Disclosures would lead to an increase in financial performance. The coefficient associated with Transparency & Disclosures in the regression equation is given as 0.016. This means that for every unit increase in Transparency & Disclosures, the financial performance is expected to increase by a factor of 0.016. The coefficient of 0.016 indicates the strength and direction of the relationship between Transparency & Disclosures and financial performance. Since it is a positive coefficient, it suggests that as Transparency & Disclosures increase, financial performance tends to improve. In other words, companies that are more transparent and provide better disclosures are likely to experience higher financial performance. Further it recommended the introduction of public credit registries as the current ones are only private which could restrict access to credit information. Also the regulating authorities should be given more powers and resources to carry out effectively their regulating and supervisory credit reports. This study was carried out to contribute to the growing knowledge in the field of finance especially the area of consumer protection policy functions towards improving financial performance of commercial banks in Rwanda. Future researchers could also consider expanding the scope of the period to ten years or when the consumer protection policy functions increase from the current three. Researches could also be done on effect of credit reference bureaus functions on mortgage finance institutions. Keywords: Commercial banks, Rwanda, Transparency & Disclosures, financial performance CITATION: Byayesu, K., & Mulyungi, P. (2023). Effects of transparency & disclosures on the financial performance of commercial banks in Rwanda . The Strategic Journal of Business & Change Management, 10 (2), 1141 – 1153.