Investment Risk Management and Financial Performance of Rwanda Social Security Board(RSSB).

Abstract

Purpose: This research study generally assessed the relationship between Investment risk management and financial performance of Rwanda Social Security Board. It equally important assessed the effect of risk environment, analyzed the effect of risk control, and assessed the effect of risk monitoring on the financial performance of the Rwanda Social Security Board (RSSB).

Materials and Methods: The used research design in this study was descriptive. A sample size of 125 respondents was drawn from 180 employees working in RSSB Headquarters. The study used a purposive sampling technique to select respondents. Information was collected using a structured questionnaire administered to respondents and statistically analysed using means, standard deviation and regression analysis via SPSS version 25.0.

Results: Results from the first objective shown by a mean M=5.87 and standard deviation SD=2.77 strongly agreed with the statement that a formal risk management system is in place and overall investment objectives are defined and communicated to staff. The study agreed that RSSB Board of Directors approves all investment policies and ensures management takes necessary action. As shown by the mean M =5.45, S.D=1.96. The study concurred that guidelines governing investments are in place and RSSB stands on it, demonstrated by M= 5.67, S. D=0.499.  From the results, the second objective demonstrated that the respondents strongly agreed that RSSB ensures that principles and procedures relating to investment and risk response is followed consistently. By M =5.87, S.D=2.77, duties are separated at different levels of management and the Board strongly agreed by M=5.58, SD=2.037, and testing, auditing, assessments of RSSB investment procedures are performed by independent personnel strongly agreed by M =5.85, S.D =2.07. A proactive way to deal with risk administration includes designating risk spending plans and setting risk resilience. Portfolio managers should practice vigilance inside plainly characterized boundaries as a component of their investment strategy. The result from the third objective revealed that there is a strong monitor of investment threshold and rating of sound investments by M =5.58, S.D =2.77. When the risks have been characterized and controls have been set around these risks, a methodical procedure of ordinary observing and detailing of these risks by a independent group guarantees approval and consistency of the approach. Regression analysis, a unit increment in risk environment may bring to increment in productivity by 2.008. A unit enhancement in risk control might bring an increase in productivity by 0.887.

Recommendations: From the research findings presented, the study recommended the need to dissect the risk of administrations and consumptions. There is a requirement for the management to completely comprehend their commitments and take fundamental activities in guaranteeing money back, train workers to change their center convictions and help to guarantee the effective achievement of firm objectives. Management should work to improve cost and expenses risk management, even if the current ratio was better, management will need to significantly reduce expenses.