THE EFFECT OF MICROFINANCE INSTITUTION’S CREDIT ON SOCIO ECONOMIC DEVELOPMENT IN RWANDA. CASE STUDY: ZIGAMA CSS 2017 - 2022

Abstract

The objective of this study was to examine the "Effect of Microfinance institution’s credit on Socio-economic development in Rwanda. The study had three specific objectives of Evaluate the Impact of micro finance’s Credit on Income Levels and Poverty Alleviation in Rwanda., Assess the Role of Zigama CSS’s Credit in Promoting Entrepreneurship and Small Business Growth in Rwanda and to Investigate the Effectiveness of Zigama CSS’s Credit in Enhancing Financial Inclusion and Socio-Economic Empowerment. The study adopted a stratified research design which assisted to examine the effect of MFI’s credit and financial performance of cooperative banks. The sample size as well as the population of the study was 81 respondents. The response rate was 100% which comprised 10 Zigama CSS’s staffs and 71 members. Data was gathered using a data collection schedule and analyzed using SPSS. The first objective was positively achieved where 61% agreed that their income level has improved through the availability of ZCSS’s credit, the second objective was also positively achieved with the rate of 56% of respondents agreed that Zigama CSS’s credit has contributed significantly in promoting entrepreneurship and small business growth. The third objective was achieved with rate of 61% of respondents agreeing that the Zigama CSS’s credit them to have access on basic services. The conclusion of the study was that all the measures of regulation used in this study are not significant redactors of financial performance of Zigama CSS in Rwanda. The capital requirement was found to be insignificant in explaining profitability of ZCSSS in Rwanda. We have examined a series of responses from the community regarding ZCSS's endeavors in various aspects. These findings provide a multifaceted view of the organization's performance, illustrating a wide spectrum of opinions and attitudes within the community. In conclusion, the community's perspectives on ZCSS are multifaceted, reflecting both appreciation and dissatisfaction. While ZCSS enjoys a strong support base in certain areas, there is room for further engagement with the dissatisfied groups to address their concerns and potentially enhance the organization's services. This comprehensive assessment of community feedback serves as a valuable resource for ZCSS to refine its strategies and better serve the community's needs.