Microfinance Institutions and Rural Social Economic Development in Rusizi District, Rwanda

ABSTRACT The major objective of study was to identify and bring awareness on the role of microfinance institutions to the Rural Socio economic development in Rusizi District Rwanda. By conducting an assessment one can determine the social economic impacts of MFI’s interventions in the area then propose solutions to increasing economic growth, promotion of self dependency, helping the unemployed to generate additional jobs for themselves, This study used correlation analysis. The target population involved a total number of 6873 where the researcher has selected 378 respondents from Community members (clients), Local leaders and MFI,s Workers. The minimum sample size was computed using the Sloven’s formula. The researcher adopted purposive sampling to select the sample size. This is where one selects participants who have the required information according to the objectives of his/her stud. To meet our objectives, we have collected data using questionnaires, The data were presented, analysed, and interpreted using Statistical Package for Social Science (SPSS). The results indicated that the respondents who earned more annual amount of income were responsible to save their money in MFI’s, these amount of income has the source in different respondent’s occupations (farms, business, etc. ref. table of the profile of the respondent and cross-tab tables).Findings indicated that due to the capacity and services delivery by MFI’s to their clients, table of capacity sub-variable shown that the level of MFI’S capacity is at high level of (mean=2.8271j. These results indicated also that Microfinance institutions have a high capacity to implement their activities through their sufficient funds, equipments and their professional commitment of the staff and customer business satisfaction. By identifying the role of MFI’s on socioeconomic development in the population under study, the results of table concerned to sub-variable of socio-economic development, researcher known that Due to MFIs services, the number of children dropping out school is reducing in the community to be very highly on the level of (mean=3.1217). Then, researcher tested Hypothesis in order to take the conclusion of rejection of null hypothesis or to agree it. The hypothesis of this research was: “There is a significance relationship between microfinance Institutions and socioeconomic Development, and there is a significance effect of Microfinance institutions to the socioeconomic development in Rusizi District”. This hypothesis was tested.

TABLE OF CONTENTS

DECLARATION A

DECLARATION B jj

DEDICATION iii

ACKNOWLEDGEMENT iv

ABSTRACT v

TABLE OF CONTENTS vi

LIST OF TABLES viii

LIST OF ACRONYMS AND ABBREVIATIONS ix

ONE THE PROBLEM AND rrs SCOPE 1

Background of the Study 1

Objectives and Benefits of Microfinance services in Rwanda 2

Microfinance policy objectives 2

The benefits of microfinance 4

Statement of the problem 5

Purpose of the Study 6

Research Objectives 7

General objective 7

Specific Objectives 7

Research Questions 7

Hypothesis 7

Scope 8

Geographic scope 8

Time scope 8

Content scope 8

Significance of the Study 9

Operational Definitions of Key Terms 9

TWO REVIEW OF RELATED LITERATURE 12

Introduction 12

Theoretical perspectives 25

Related Studies 27

Conclusions 34

Conceptual Framework 35

THREE METHODOLOGY 36

Research Design 36

Research Population 36

Sample Size 37

Sampling Procedure 38

Validity and Reliability of Instruments 38

Research Instrument 40

Data Gathering Procedures 41

Data analysis 42

Ethical Considerations 43

Limitations of the Study 43

FOUR PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA 45

FIVE FINDINGS, CONCLUSIONS AND RECOMMENDATION 61

Findings 61

Conclusion 62

Suggestions 63

Further researchers 63

REFERENCES 64

APPENDIX I: TRANSMITTAL LETTER 69

APPENDIX II: AUTHORIZATION FROM RUSIZI DISTRICT TO CONDUCT RESEARCH7O

APPENDIX III: RESEARCH INSTRUMENT 71

APPENDIX IV: RESEARCHER’S CURRICULUM VITAE 77