MICROFINANCE INSTITUTIONS SERVICES AND SOCIO-ECONOMIC DEVELOPMENT OF THEIR MEMBERS IN RWANDA

Abstract

This study investigates the role of SACCO-Gisozi, a microfinance institution in Rwanda, in promoting socio-economic development. Through a survey of SACCO-Gisozi members, the study examined the institution's services, challenges, and impact on the community. SACCO-Gisozi offers a range of services, including loans, savings, advisory services, and networking opportunities. However, the institution faces challenges such as defaulting cases and competition from other financial institutions. Respondents reported on high interest rate of (mean:13.333, standard deviation: 14.43376) and perceived challenges with mortgage loan (mean: 13.333, standard deviation: 18.77054). Despite these challenges, SACCO-Gisozi has made a significant contribution to socio-economic development. The study found that the institution's advisory services were highly valued by members (mean: 20, standard deviation: 21.21). Additionally, SACCO-Gisozi played a crucial role in connecting members to external funding programs (85% approval) and promoting social inclusion (80% approval for women's engagement and 97.5% approval for youth involvement). Statistical analysis revealed a weak positive correlation between SACCO-Gisozi services and socio-economic development (R value: 0.420). However, the model explained only 17.8% of the variation in the outcome variable, suggesting that other factors also influence development. In conclusion, SACCO-Gisozi has demonstrated its potential to enhance household standards through its various services. While challenges still existing, the institution's positive impact on the community is evident. Future research should explore strategies to address the challenges faced by SACCO-Gisozi and to further strengthen its contribution to socio-economic development.