Microfinance Services and Poverty Alleviation in Kigali City - Rwanda

ABSTRACT This study was about the effects of Microfinance on poverty alleviation in Kigali City. The study specifically sought to assess the effects of; 1) credit access on poverty alleviation; 2) members' market access on poverty alleviation; 3) to evaluate the challenges facing Microfinance in mobilizing resources for lending to members in relation to poverty alleviation; and 4) to evaluate the effects of Microfinance members training on poverty alleviation in Kigali City. A cross sectional design was used in the study, which were both qualitative and quantitative approaches. Purposive and random sampling techniques were used to obtain a sample from the study population. Data was collected using questionnaires and interviews. Secondary data was also used to add meaning to the responses derived from primary data. Data was later presented and analyzed using frequencies, percentages and Pearson's Chi-square. The study found out that Duterimbere Microfinance had a very limited loan base, which therefore was a determinant factor in the amount of credit to be offered, when it would be offered, who was to access the credit, and for what purpose was it intended as well as on lending to members. That notwithstanding, members for which reasons, delayed to service their loans or even defaulted. It was established that the Microfinance has not imparted adequate entrepreneurial skills to members to help them utilize credit effectively. On the other hand, partner organizations were limited to the Microfinance officials.Against the above findings, the study recommended that it is high time the Microfinance members receive regular trainings, workshops and seminars, with focus on the activities undertaken. Further more government should improve on the existing laws under Microfinance statute and regulations of 1991/1992 respectively. The law should specifically address activities conducted by the tier for financial institutions in which Microfinance institutions fall.