Abstract:
As with any financial institution, the biggest risk in bank is lending money and not getting it back.
Credit risk is a particular concern for MFIs because most micro lending is unsecured. The people
covered are those who cannot avail loan from banks and such other financial institutions due to the
lack of the ability to provide guarantee or security against the money borrowed. Many banks do not
extend loan to these kinds of people due to the high default risk for repayment of interest and in some
cases the principle amount itself. Therefore, these institutions required to design sound loan
management that entails the identification of existing and potential risks inherent in lending
activities. (Dan Coster, 2001). This research aimed to achieve the following specific objectives:To
examine different types of loans provided by INKERAGUTABARA SACCO Rubavu District, To
analyse loan management practices effectiveness in INKERAGUTABARA SACCO Rubavu District
2021-2023, To assess the contribution of loan management on socio-economic development of
customers of INKERAGUTABARA SACCO Rubavu District. Based on the nature of the topic to
cover, the researcher has chosen to ask the number of eighty eight (88) as a sample size from total
population of 1050 members of Sacco Inkeragutabara. In general it can be concluded that USACCOs
has helped Rwanda Government to implement policies in order to reduce poverty and improve
people’s lives. These policies which financed by USACCOs are like RSSP, twelve years basic
education, Mutuelle de Santé. In this way finally, we bring to a close where hypothesis are, then
verified and conformed by all these results. The study has found that UMURENGE SACCO has
positively contributed their social economic welfare. The government should therefore, subsidize
services for poor people to make the services more affordable for clients, assist SACCOS in saving
and credit cooperative mobilization to increase loan able fund, assist SACCO in training members
on loan utilization, saving and credit cooperative culture and business management, create more
jobs to empower members through government expenditure in public works, and subsidize SMEs and
other generating activities. The study revealed that, government programs and policies greatly affect
the people’s social economic welfare. The government should evaluate and pilot its policies and
programs before their implementations. And it should focus on policies aiming at poverty reduction.
