REGISTRATION NUMBER;

Psp/3104/09- MGT

QUESTION: you are a decision-maker in a Rwandan bank that has no branches outside Rwanda. Your bank is considering expanding to one neighboring country that borders Rwanda. Into which country will you decide to expand and why? Discuss also why you have not chosen the other possible markets.

Decision making in the bank is considered to be a complex process since the decision maker has to choose an alternative from a pool of other alternatives that will best fit with the objectives of the bank. This may prove to be difficult since a lot of factors are to be considered and yet some of the factors may be subject to change especially in the case of projections of possible future outcomes, the decision maker thus needs to possess good analytical skills in order to successfully anticipate these outcomes and to properly deal with any deviations from the anticipated outcomes. I SELECTED UGANDA AS THE COUNTRY OF CHOICE DUE TO THE FOLLOWING FACTORS MENTIONED BELOW:Uganda has the advantage of promising new emerging markets as is the case of south Sudan that has recently gained independence. The easiest route to juba is through Uganda. This continued business growth between the two countries has led to the growth of the banking sector in Uganda. There is also increased growth in banking literacy in Uganda as compared to the other countries such as Burundi and democratic republic of Congo. Farmers especially in the rural areas are being informed and getting to know the importance of banks in the form of earning interest and acquiring loans. Uganda has an advantage over Tanzania and democratic republic of Congo in terms of accessibility to all corners of the country. Uganda has an established tarmac road network as compared to the above two countries that enables it to access potential bank customers. There is a better sense of political stability in the case of Uganda as compared to Burundi and democratic republic of Congo. The central bank of Uganda is more effective in implementing its tools of monetary

policy such as the regulation of interest and inflation rates to keep the currency stable as compared to the other central banks. Uganda when compared with Burundi and DRC has a stable financial economy that can be a better business climate for banking activities brought about by the growing number of investments and Gross Domestic Product (Uganda 17,011 million USD, DRC 13,145 million USD, Burundi 1,611 millionUSD). (source_http://en.wikipedia.org/wiki/List_of_countries_by_GDP_ %28nominal%29)

THE REASONS FOR NOT CHOOSING OTHER POSSIBLE MARKETS In the case of democratic republic of Congo political instability was the main deterrent in setting up a branch in the country due to the persistent rebel groups in the country. Burundi does not have a well developed banking sector in terms of leadership and coverage. The percentage of Burundian people that use banks is also still low mainly due to bank illiteracy and unemployment in the country. Tanzania does not have a sufficiently good road network through out the country and has a high level of competition among its banks that would affect the profits of the bank branch I would introduce. Tanzania also has a high inflation rate of 7.2 that will hinder the activities of the bank branch. (source http://en.wikipedia.org/wiki/List_of_countries_by_inflation_rate ).

In conclusion the banking sector in the region is still in its infancy level and is showing potential for growth but this can be achieved by guidance and favourable monetary policies by the central banks and by encouragement of banking investors by the respective governments to further grow the banking sector with their experience. The governments also have to maintain peace and order and banking incentives to be able to attract new investors in the banking sector.