Effect of Enterprise Risk Management on Value for Money among Commercial Banks

Abstract

This study aimed at examining the effect of Enterprise Risk Management (ERM) on Value for money (VFM) in Tanzania, a case of National Microfinance Bank in Dodoma City. Specific objectives of this study focused on assessing the effectiveness of ERM in National Microfinance Bank, assessing the effectiveness of VFM in National Microfinance Bank, and examining the relationship of ERM and VFM in National Microfinance Bank. This study employed descriptive research design and quantitative research approach. The sample size was 92 bank officers. This study used simple random sampling technique in selection of respondents. The study only collects primary data by using questionnaire methods. Descriptive statistics were used in analyzing quantitative data. The first objective reveals positive perceptions in areas such as risk identification, training provision, and accountability promotion. Effective communication emerged as a critical factor in building trust and credibility among stakeholders, although there is a need for improvement in the bank’s adaptability to changing market conditions. The second objective indicates positive customer sentiments overall but highlighting mixed feelings and potential dissatisfaction regarding interest rates on loans. The third objective reveals crucial connections between risk assessment and mitigation, emphasizing the importance of an informed workforce, and underscoring the positive impact of transparent communication on customer trust and satisfaction. The study recommends that National Microfinance Bank should build upon its effective ERM system by addressing the specific concerns of respondents who expressed neutrality or disagreement, and should also focus on improving competitive savings account rates and fee transparency to enhance overall customer satisfaction and loyalty.