Impacts of umurenge sacco programme on socioeconomic development of rwanda

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DECLARATION
I Jean d’Amour NKAKA hereby declare that the work presented in this dissertation entitled
Impacts of Umurenge SACCO programme on socioeconomic development of Rwanda is my
original work and has never been presented elsewhere for any academic qualifications.
Any reference in terms of books or any other written materials are indicated in the bibliography.
Student’s signature
……………………………………………..
Date: ……/ …………../…………..
Jean d’Amour NKAKA

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CERTIFICATION
This is to certify that this work entitled “Impacts of Umurenge SACCO programme on
socioeconomic development of Rwanda”. A case study: RP Rurenge People SACCO is carried
out by Jean d ‘Amour NKAKA under my guidance and supervision.
Supervisor’s signature: ………………………………
Supervisor: Mr. Aristide MANIRIHO
Date: ………./ …………/……….

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DEDICATION
To the almighty GOD
To my Mammy
To my brothers, sister, relatives and friends
To my classmates and roommates
I dedicate this work.

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ACKNOWLEDGEMENT
I am greatly indebted to Mr. Aristide MANIRIHO for undertaking the task of supervising this
work, her willingness, guidance and assistance to identify in this research. I gained a tremendous
amount of knowledge under his supervision.
I am deeply indebted to the Government of Rwanda for providing funds for my studies.
A special word of appreciation goes out to the University of Rwanda through the school of
Economics. I admire your advices, knowledge provided, favorable learning environment and
cooperation during my studies at University.
Special thanks go to the entire administration of RP SACCO for providing the required
information without the cooperation and involvement of members of this Sacco, this work would
have gone nowhere. Thank you also for embracing new things, your patience in answering my
numerous questions and willingness to work with me on the field is well appreciated.
I express again my gratitude and thanks to my father Jean baptiste KAGINA and my mother
Clemence MUKAGATARE. They did a hard work to make me growing and looking after me
during my school life and they are the one who makes me what I am now. Mammy, Daddy
I love you. Special recognition also goes to my brothers HAHIRWABASENGA J. Marie Louis,
IRAKIZA Gilbert, KAGINA Schadrak, MUGABO Jean Pierre and my sister UMUGENI
Denyse I appreciate their encouragement and support.
Finally, I am grateful to all my colleagues, all students of school of Economics and my
roommates for their moral support during the four years of my studies at University of Rwanda.
May God bless you all!!!

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ABBREVIATIONS AND ACRONYMS
SACCO: Saving and Credit Cooperative
SACCOs: Saving and Credit Cooperatives
RP SACCO: Rurenge people saving and Credit Cooperative
MFI: Micro-finance
BNR: Bank National du Rwanda (National Bank of Rwanda)
NGOs: Nongovernmental organizational
ICA: International Cooperatives Alliance
WOCCU: World Council of Credit Unions
UR: University of Rwanda
UBPR: Union de banque populaire du Rwanda
FSDP: Financial sector Development Programme
SED: Socioeconomic development
FAO: Food agriculture organization
AFI: Alliance for Financial Inclusion
RCA: Rwanda cooperative Agency
DFID: Department for international development
ACCOSCA: African Confederation of Cooperative Saving and Credit Associations
USA: United state of America
UNDP: United Nations Development program
WWII: Second World War
GDP: Gross domestic product
HDI: Human development index
MDGS: Millennium Development Goals
EDPRS: Economic Development and Poverty Reduction Strategy
SPSS: Statistical Package for the Social Scientists
ANOVA: Analysis of Variance
URAC: Union Regional de Apoyo Campesino
MINECOFIN: Ministry of finance and economic planning

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Table of Contents
DECLARATION ..............................................................................................................................i
CERTIFICATION ...........................................................................................................................ii
DEDICATION................................................................................................................................iii
ACKNOWLEDGEMENT ..............................................................................................................iv
ABBREVIATIONS AND ACRONYMS ........................................................................................v
LIST OF TABLES AND FIGURES...............................................................................................ix
ABSTRACT.....................................................................................................................................x
CHAPTER ONE: GENERAL INTRODUCTION ......................................................................... 1
1.1 Background to the study ....................................................................................................... 1
1.2 The conceptual framework.................................................................................................... 4
Figure 1.2.1: The conceptual framework of the study. ............................................................... 5
1.3 Problem statement................................................................................................................. 6
1.4 Research objectives............................................................................................................... 6
1.4.1 Main objective................................................................................................................ 6
1.4.2 The Specific Objectives ................................................................................................. 7
1.5 The research questions.......................................................................................................... 7
1.6 The Research Hypothesis...................................................................................................... 7
1.7 The Scope of the Study......................................................................................................... 8
1.8 Justification of study............................................................................................................. 8
CHAPTER TWO: LITERATURE REVIEW ................................................................................. 9
2.1 Definition of key word.......................................................................................................... 9
2.1.1 The concept of savings....................................................................................................... 9
2.1.2 Determinants of personal savings ...................................................................................... 9
2.1.3 Credit................................................................................................................................ 10
2.1.4 Cooperatives..................................................................................................................... 11
2.1.5 Saving and credit cooperatives societies.......................................................................... 11
2.1.6 Social................................................................................................................................ 11
2.1.7 Socio-economics .............................................................................................................. 12
2.1.8 Economic development.................................................................................................... 12
2.2 Theoretical foundation of SACCO and Socioeconomic development ............................... 12

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2.2.1 Socio-economic development.......................................................................................... 13
2. 2.2 socioeconomic development inductors ........................................................................... 14
2.3 Evolution of Umurenge SACCOs in Rwanda .................................................................... 16
2.3.1 Services provided by SACCOs........................................................................................ 16
2.4 Importance of FMI / SACCOs in Socioeconomic development ........................................ 17
2.4.1 SACCOs increasing member’s income ....................................................................... 17
2.4.2 SACCOs in employment creation and production capacity ........................................ 18
2.4.3 Asset ownership, education and health care. ............................................................... 18
2.5 Status of MFIs /SACCOs in Rwanda.................................................................................. 19
CHAPTER THREE: METHODOLOGY ..................................................................................... 21
3.1 Introduction......................................................................................................................... 21
3.1.1 Study area......................................................................................................................... 21
3.1.2 Population of study and sample size determination......................................................... 21
3.1.3 Sampling techniques ........................................................................................................ 21
3.2 PROCEDURES TO BE ADOPTED IN THE COLLECTION OF DATA ........................ 22
3.2.1 Sources of Data ............................................................................................................ 22
3.2.2 Primary Data ................................................................................................................ 22
3.2.3 Secondary data ............................................................................................................. 22
3.2.4 Data collection techniques ........................................................................................... 23
3.2.6Questionnaire ................................................................................................................ 23
3.2.7 Observation technique.................................................................................................. 23
3.2.8 Interview ...................................................................................................................... 23
3.2.9 Documentation............................................................................................................. 23
3.2.10 Data analysis method ................................................................................................. 23
3.2.11 Processing and interpretation of data ......................................................................... 24
3.2.12 Data processing.......................................................................................................... 24
3.2.13 Editing........................................................................................................................ 24
3.2.14 Tabulation .................................................................................................................. 24
3.2.15 Quality control ........................................................................................................... 24
CHAPTER FOUR: DATA ANALYSIS, PRESENTATION AND
INTERPRETATION OF THE FINDINGS .................................................................................. 25
4.1. Introduction........................................................................................................................ 25
4.1.1 PRESENTATION AND INTERPRETATION OF THE RESULTS .............................. 25
4.1.2. Distribution of respondents......................................................................................... 25
4.2. DESCRIPTIVE STATISTICS OF VARIABLES ............................................................. 27

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4.3 Evolution of savings in Rurenge People SACCO from 2011 to 2015............................ 28
4.4 Socioeconomic status of Rurenge People SACCO members before and after joining
SACCO................................................................................................................................. 29
Table 4.4.2: Paired Samples Test of monthly income before and after. ............................... 30
4.5 The contribution of Rurenge People SACCO to the improvement of life conditions of its
members.................................................................................................................................... 31
Table 4.5.1. Contribution of Rurenge People SACCO to improvement of life condition of its
members.................................................................................................................................... 31
4.6. Challenges facing Rurenge People SACCO members ...................................................... 32
Table 4.6.1 Challenges facing Rurenge People SACCO members .......................................... 32
4.7 Interpretation of the results ................................................................................................. 32
CHAPTER FIVE: DISCUSSION OF THE RESULTS................................................................ 33
5.1 The findings on evolution of savings in Rurenge People SACCO from 2011 to 2015 ...... 33
5.2 The findings on socioeconomic status of Rurenge People SACCO members after and
before joining Umurenge SACCO............................................................................................ 33
5.3 The Findings on the contribution of Rurenge People SACCO to the improvement of life
condition of its members........................................................................................................... 33
5.4 The Finding on Various challenges facing Rurenge People SACCO members................. 34
5.2 Conclusion .......................................................................................................................... 34
5.3 Limitations of the study ...................................................................................................... 34
5.4 Recommendations............................................................................................................... 35
5.4.1 To the management of UMURENGE SACCOs.......................................................... 35
5.4.2 Members Savings Development .................................................................................. 36
5.4.3 Credits administration.................................................................................................. 36
5.4.4 Mortgage of Savings Vis – a – Vis – Micro credits..................................................... 36
5.4.5 Marketing of Financial Services .................................................................................. 37
5.4.2 To the government of Rwanda..................................................................................... 37
5.4.3 Suggestion for further Researchers.............................................................................. 37

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LIST OF TABLES AND FIGURES
Figure 1.2.1: The conceptual frame work of the study. .................................................................. 5
Table 3.1.4: Distribution of the population of the study and the sample size per cell.................. 22
Table 4.1.3: Characteristics of Rurenge People SACCO members in Ngoma district................. 26
Table 4.2.1: Descriptive Statistics ................................................................................................ 28
Table 4.4: Paired Samples Correlations table ............................................................................... 30
Table 4.4.2: Paired Samples Test of monthly income before and after. ....................................... 30
Table 4.5.1:Contribution of R P SACCO to the improvement of life condition of its members..32
Table 4.6.1 Challenges facing Rurenge People SACCO members . ............................................ 33

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ABSTRACT
The study work entitled impacts of Umurenge SACCO programme on socioeconomic
development of Rwanda case study of Rurenge People SACCO in Ngoma district was
conducted with an aim of to analyze the impacts of Umurenge SACCO programme on
socioeconomic development of Rwanda
1. Assess the evolution of the savings of Rurenge People SACCO from 2011 to 2015
2. To establish the difference between mean monthly income of Rurenge People SACCO
members before and after joining SACCO
3. The contribution of Rurenge People SACCO to socioeconomic life conditions/status of
its members
4. To identify challenges faced by Rurenge People SACCO members
The researcher reviewed the related literature to come up with the full idea of the study, both
primary data and secondary data were obtained and analyzed, the researcher used questionnaire
on random sampled, for secondary data as well as existing literature in the text of Umurenge
SACCO, Rurenge people SACCO annual reports were used, the collected data were present
in statistical tables, analyzed and interpreted in line with the objectives to have meaningful
information. The research also revealed that Umurenge SACCO member welfare goes hand
in hand with socioeconomic development of the country at large, this was revealed
by the respondents who highlighted that Rurenge people SACCO services play an important role
in development of the country, by helping poor people to expand their economic activities
and increase their income and assets, building their self confidence grows simultaneously,
the government of Rwanda has established Umurenge SACCO in all sectors s of Rwanda, with
aim of filling the gap in the finance market in Rwanda by providing poor people with access
of financial service as means of help to increase their productivity and help low- income earners
people to reduce risks, improve management, raise productivity or obtain higher returns
on investments, improve their welfare.

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CHAPTER ONE: GENERAL INTRODUCTION
This chapter presents the background to the study, statement of the problem, research objective,
research question, and research hypotheses, Justification of the study and the scope of study
1.1 Background to the study
SACCOs is one of microfinance which can play significant role to develop Economic situation
of the developing countries like Rwanda
“ A cooperative is an association of person usually of limited means who have voluntarily joined
together to achieve a common economic end through the information of democratically
controlled business organization, making equitable contribution to the capital required
and accepting a fair share of risk and benefit of undertaking” (Sharma, 2004).
The history of micro financing can be traced back as far as the middle of the 1800s, when the
theorist Lysander Spooner was writing about the benefits of small credits to entrepreneurs
and farmers as a way of getting the people out of poverty, as the microfinance market has
matured in recent years, competition has increased among major MFIs against this backdrop
of intense competition, overlapping loan problems among major MFIs and borrowers has
emerged as a problem in Bangladesh while poor people have more choices from which MFIs
to borrow money, the number of people who use multiple loans from various MFIs has been
increasing as a result, there are ever more heavily indebted people in Bangladesh, and this is
beginning to pose a threat to MFIs and the microfinance industry (Yasuhiko, 2011).
Overall MFIs in Africa are dynamic and growing; the 163 MFIs that provided information for
study, 57 percent were created in the past eight years and 45 percent of those in the past four
years African MFIs appear to serve the broad financial needs of their clients. Unlike trends in
most regions around the globe, more than 70 percent of the reporting African MFIs offer savings
as a core financial service for clients and use it as an important source of funds for lending.
MFIs in Africa tend to report lower levels of profitability, as measured by return on assets, than
MFIs in other global regions (Asmelash, 2003).

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African MFIs face many challenges, operating and financial expenses are high, and on average,
revenues remain lower than in other global regions, efficiency in terms of cost per borrower is
lowest for African MFIs. Technological innovations, product refinements, and ongoing efforts
to strengthen the capacity of African MFIs are needed to reduce costs, increase outreach,
and boost overall profitability. Overall, African MFIs are important actors in the financial sector,
and they are well positioned to grow and reach the millions of potential clients who currently
do not have access to mainstream financial services. MFIs in sub-Saharan Africa include a broad
range of diverse and geographically dispersed institutions that offer financial services to low-
income clients: non-governmental organizations (NGOs), non-bank financial institutions,
cooperatives, rural banks, savings and postal financial institutions, and an increasing number
of commercial banks (Meehan, 1996).
In East Africa, Microfinance providers such as commercial banks, micro deposit taking
institutions, microfinance institutions generally serve urban areas and are biased towards
financing commercial activities. The professionalization of the microfinance sector, increased
competition in urban areas (also from commercial banks offering microfinance) and the adoption
of new technology are driving the outreach of savings and credit services into rural areas.
However, the very remoteness of certain areas, the high costs of services, financial illiteracy, and
the unsuitability of financial products for agriculture restrict the reach of microfinance
(Irma, 2012).
Uganda is generally seen as the country with the most vibrant and successful microfinance industry
in Africa. Some MFIs have experienced strong growth and are now reaching a considerable number
of clients, with three serving between 25.000 and 45.000 clients. A number of microfinance
providers are close to financial sustainability or have already surpassed it. A series of impact studies
conducted in Uganda in the past years have demonstrated that the provision of microfinance services
contributes to reduce client vulnerability to economic risks, results in strengthening linkages of
clients and their households to the agricultural sector, and enables clients to acquire valued skills.
Moreover, all observers agree that the success of microfinance in Uganda is closely linked
to a number of enabling contextual factors specific to the country (Kafle, 2012).
Micro-finance is an important part of the financial sector in Rwanda, led by the Union des Banques
Populaires du Rwanda, a network of micro-finance institutions that served as micro-lenders

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and micro-banks for nearly two-thirds of all depositors in the country. This institution controlled over
97% of the micro-finance sector in Rwanda, where the development of microfinance programs
gained a worldwide acceptance and popularity since 1980s in providing financial services to the
poor (UBPR, 2005).
Rwanda’s development policy is guided by Vision 2020. This vision statement, issued by the
Ministry of Finance and Economic Planning in 2000, describes the Government’s aim to transform
Rwanda into a middle income country and an economic trade and communications hub by the year
2020. It also sets the stage for the financial sector reform process that led to the development of the
Financial sector Development Programme (FSDP) which was launched in 2006. The aim of the
FSDP is to develop a stable and sound financial sector for Rwanda. Its objectives include enhancing
access to, and affordability of, financial services and the development of financial institutions and
market incentives that would facilitate the entrenchment of a savings and long term investment
culture amongst Rwandans (Irma, 2012).
National Dialogue meeting held in December 2008 recommended the creation of SACCO at the
level of each administrative sector, thus 416 SACCOs created in the line of Umurenge SACCOs
is a Government initiative aimed at increasing the accessibility of financial services to Rwandan
citizens. The concept of Umurenge saving and credit cooperatives (Umurenge SACCOs) was
based on an understanding that banks and other financial institution were more concentrate in
urban areas while the majority of the Rwandan population lives in rural areas. Banks and
financial institution were also not able to provide financial service to the poor people.
Establishing a SACCO in every Umurenge was aimed as a result of bridging this gap it was to
encourage the Rwandan citizen to use financial institution to enable them to save and access
loans (Irma, 2012).

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1.2 The conceptual framework
The conceptual framework interlinks Independent variable and dependent variable and intervening
variable as depicted below: Independent variable: in this case independent variable represents the
opportunities, services offered by SACCOs mainly credit and saving, the services and opportunities
offered by SACCOs include: saving product, loan/credit product, investment opportunities in form
of shares, and others and these services have impact on the members‟ social economic development.
The dependent variable this attempt to depict the likely impact on the members‟ SED, as result
of activities of the SACCOs highlighted above. It is expected that the availability of SACCOs, help
members of SACCOs in improving their standard of living and it is assumed that at household
level, SACCOs help individuals to increase their income, assets owned, investment, take children
to schools, buy health insurance, and improve housing, access to hygienic water. The intervening
Variables in the model Attempt to portray that other factors such as government policy (fiscal policy
and monetary policy), Global financial system, family size, geographical location and climate change
may also impact on the members‟ SED

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Figure 1.2.1: The conceptual framework of the study.
Impact of Umurenge SACCOs service SED of Rwanda
(Explanatory variable) (Explained variable)
Disturbance term
SOURCE: Adapted from Abebe ( 2006).
During this study some aspects will be left out due to limited data available, therefore, the
researcher will adopt some elements of the above model, model above clearly identifies the
three types of variables that were focused on in the study. Independent variables (Umurenge
SACCO services activities:, saving product and loan product); Dependent variable
(Socioeconomic development Indicator measured in terms of members’ level of income, living
standard indicator wealthy/assets owned; members’ health insurance, food) and; the disturbance
term (intervening variables such as family size, government programs, fiscal policy and the
disturbance term can have an effect on the dependent/independent variables as elucidated above.
SERVICES OFFERED
BY Umurenge SACCOs
-CREDIT
-SAVING
SED OF
HOUSEHOLDS
-Income, asset ownership,
investments
-Basic need and services
(health, education, food,
water)
Family size, Government policy, fiscal policy and) global financial system;
Geographical location and climate change membership duration
NB: The disturbance term may well represent all those factors that affect SED but are
not taken into account explicitly.

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Microfinance are assumed to have positive impact on socioeconomic development of its
members however, this will be achieved only when members patronize the Microfinance
by effectively saving with, and borrowing from them as this leads to capital accumulation,
increased investment, employment, high incomes, in developing their standard of living and
hence improved quality of life of micro finances’ membership.
1.3 Problem statement
According to World bank (2012), Rwanda is one of developing country in the world with
majority of people have a middle income earns and poor this implies that they cannot afford
financial service offered by formal commercial institution, lack of financial services like credits
and savings is the barrier to social economic development of individual in particular and the
country in general, to help the people who are not able to access commercial institutions services
SACCOs were created. In Rwanda,
However, there is an increasing institutional gap in the provision and fulfilling long-term
financial service demand in both, rural and urban areas. The operational experiences suggest that
different factors influence the efficiency of SACCOs in providing services to meet the members’
demand of improving their socio-economic well-being. Unfortunately these factors have not yet
been validated (Mwakagire, 2011).
This study, therefore, intends to examine what impact SACCOs have on members’ social
economic development? Therefore, this study is intended to evaluate whether USACCOs
contribute in changing standard of living of their members.
1.4 Researchobjectives
The objectives of the current study are divided into general objectives and specific objectives.
1.4.1 Main objective
The purpose of this study id to assess the impacts of Umurenge SACCO programme on
socioeconomic development in Rwanda

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1.4.2 The Specific Objectives
This study aims specifically to:
1. Assess the evolution of the savings of Rurenge People SACCO from 2011 to 2015
2. To establish the difference between mean monthly income of Rurenge People SACCO
members before and after joining Sacco
3. The contribution of Rurenge People SACCO to socioeconomic life conditions/status of
its members
4. To identify challenges faced by Rurenge People SACCO members
1.5 The research questions
1. How have savings evolved in Rurenge People SACCO from 2011 to 2016?
2. Is there any difference between mean monthly income of Rurenge People SACCO
members before and after joining Sacco?
3. What are contributions of Rurenge People SACCO to socioeconomic life condition of it’s
of its Members
4. What are challenges faced by Rurenge People SACCO members?
1.6 The ResearchHypothesis
In order to conduct impact assessment and to address the main objective of the study, this
particular study has four alternative hypotheses:
1. The saving in Rurenge People SACCO have been increasing from 2011 to 2015
2. The mean of monthly income of members after joining Rurenge People SACCO
is greater than the mean of monthly income before members joining Rurenge People
SACCO
3. USACCOs‟ services such as credit and saving may contribute to their members by helping
them to increase their standard of living.
4. A number of challenges arose as the Umurenge SACCO Program was implemented and
Researcher had to find out those challenges

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1.7 The Scope of the Study
Geographically the study looked at Umurenge SACCO operating in NGOMA District, Rurenge
Sector, this study was also limited in terms of period since it will cover the period from 2011 to
2015. The researcher started with the year 2011 as SACCO in Rurenge have started operations
in 2011. On the other hand the researcher was limited to 2015 based on the availability of data
included in the SACCOs financial reports for the period ended the 31st December, 2015.
This study is quantitative and qualitative research where descriptive, correlation and linear
regression research design were used. Population of the study was composed by the beneficiaries
of Rurenge People SACCO operating in NGOMA District.
1.8 Justification of study
Normally, also the people of Rurenge sector in Rwanda have shown their ability to utilize financial
services through their participation in SACCO. The government of Rwanda is convinced that if
SACCOs are given adequate attention, they have potential impact to contribute considerably to SED
of country. Despite all these well-designed interventions to ensure SACCOs are fully and easily
accessible to the underserved areas of the country, it is apparent that there is still a lower level
of socio-economic development in urban and rural communities to an extent that they have not
managed to meet all the basic requirements. This study helped the researcher to improve the
knowledge and skills acquired in economics and the findings of this study showed the effect
of SACCOs on members‟ socio-economic development, further ways to mobilize saving and
improve members‟ economic status, and thereby the management will refer to this research in
making decisions for superior performance, final the study showed the importance of SACCOs
to members‟ economic wellbeing and this may motivate members to have positive attitudes
towards SACCOs. This study will also have benefits for academicians as it will add new
knowledge on existing literature, and will serve as a reference to other researchers who will be
interested in the same area.

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CHAPTER TWO: LITERATURE REVIEW
This Chapter contains the existing literature on: saving and credit cooperative, Umurenge
SACCO program in Rwanda, impact of SACCOs on socioeconomic development of Rwanda
2.1 Definition of key word
This Chapter contains the existing literature on: saving and credit cooperative, Umurenge SACCO
program in Rwanda, socioeconomic development, the impact of SACCOs on socioeconomic
development and related past studies about the impact of SACCOs on members socioeconomic
development.
2.1.1 The concept of savings
According to FAO (1995), savings are resources which one decides to put aside for investment
purposes and not for luxury. What people save, avoiding consuming all their income, is called
"personal savings". These savings can remain on the bank accounts for future use or be actively
invested in houses, real estate, bonds, shares and other financial instruments.
A study by Efina (2011), found both savers and non-savers agreeing that personal savings plays
an important role in people‘s lives. Savings ensures the continuity of a business as it provides
fresh funds to grow the business. It helps in the attainment of set goals, and at the same time
encourages financial discipline. Savings also act as a means of insurance, so that emergencies
can be dealt with as they arise.
2.1.2 Determinants of personal savings
Piana (2003), has stated that a tri-lateral relationship among savings, consumption, and income is
the key determinant of the amount of personal savings. On the first side, given a certain income,
the decision to buy goods and services (consumption) negatively affects savings. Savings
passively adjust to consumption and income. They represent a resource slack, buffering shocks
in income and consumption desires. On a second side, savings can be actively planned in binding
agreements, like many pension schemes, with consumption passively adjusting to changes in
income. In other terms, savings can arise from a compulsory tendency of renouncing and
postponing even banal consumption (greediness) or, instead, they can be the result of sharply
rising income, with higher consumption taking place meanwhile.

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By contrast, savings can be also the outcome of negative expectations about future income (as
when one is afraid of being dismissed) (Hey, family, hardships are coming - we need to reduce
our absolute level of consumption). Still another different case is the situation when a family,
after having spent a lot in a consumption boom, try to brake its tendencies before (or after!) they
become unsustainable (Piana, 2003).
According FAO (1995), notes the following as factors influencing personal savings in groups
such:
I. Savings depend on income. Theoretically, more income means more capacity to save.
But without a decision this may not be so.
ii. Saving consciousness/willingness is decided not by income, but by decision and forming a
habit. A person can have a little income, but if she has decided to save and form the habit, she
will have more savings than the person with a higher income who has not decided to save.
iii. · Savings depend on the determination/persistence of a person to get out of poverty.
iv. · Savings depend on factors such as family size, slack period in the agricultural season.
v. · By saving as a group, it is easier to make savings a habit. We seem to be helped by the fact
that there are others who are doing the same thing we do and that together we are able to do
things better.
2.1.3 Credit
Credit (from Latin credere translation. "to believe") is the trust which allows one party to
provide money or resources to another party where that second party does not reimburse the first
party immediately (thereby generating a debt), but instead arranges either to repay or return those
resources (or other materials of equal value) at a later date The resources provided may be
financial (e.g. granting a loan), or they may consist of goods or services (e.g. consumer credit).
Credit encompasses any form of deferred payment (Caroline, 1999).
Credit is extended by a creditor, also known as a lender, to a debtor, also known as a borrower;
credit does not necessarily require money. The credit concept can be applied in barter economies

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as well, based on the direct exchange of goods and services. However, in modern societies,
credit is usually denominated by a union of account. Unlike money, credit itself cannot act as a
unit of account (AFI, 2004).
2.1.4 Cooperatives
A co-operative is an autonomous association of persons united voluntarily to meet their common
economic, social, and cultural needs and aspirations through a jointly owned and democratically
controlled enterprise, the equal members in rights and duties take part democratically in the
management and the administration of the company of which they share the duties and the
advantages proportionally with the transactions of each member. All active members from the
general body and it elect the Board of Directors (RCA, 2013).
According to Herman (2012), the concept cooperative takes a quite several definitions depending
on schools of thought (cooperative enterprise, Commonwealth School and the Socialist
Cooperative School). Alike, underlines that there a proliferation of definitions of cooperatives
and suggests to maintain the most common provided by the International Cooperative Alliance
(ICA) in 1998.
2.1.5 Saving and credit cooperatives societies
Saving and credit cooperative society is group of people who have a common bond live in the
same community or society save money together and lend it to one another at agreed interest
rate, time and condition. It is a democratic, unique member driven and self union (Beth, 1999).
2.1.6 Social
The term social refers to a characteristic of living organisms as applied to population's humans
and other animals. It always refers to the interaction of organisms with other organisms and to
their collective co-existence, irrespective of whether they are aware of it or not, and irrespective
of whether the interaction is voluntary or involuntary. The word "Social" derives from the Latin
word socii ("allies"), it is particularly derived from the Italian Socii states that historically allied
with the Roman Republic, though they famously rebelled against Rome in the Social War In the
absence of agreement about its meaning, the term "social" is used in many different senses and
regarded as a fuzzy concept, referring among other things (Mwelukilwa, 2001).

12
The Attitudes, orientations, or behaviors which take the interests, intentions, or needs of other
people into account (in contrast to anti-social behavior) have played some role in defining the
idea or the principle. For instance terms like social realism, social justice, social constructivism,
social psychology and social capital imply that there is some social process involved or
considered a process that is not there in regular, "non-social" realism, justice, constructivism,
psychology, or capita (Scoones, 2009).
In contemporary society, "social" often refers to the redistributive policies of the government
which aim to apply resources in the public interest, for example, social security. Policy concerns
then include the problems of social exclusion and social cohesion. Here, "social" contrasts with
"private" and to the distinction between the public and the private (or privatized) spheres, where
ownership relations define access to resources and attention (DFID, 2001).
2.1.7 Socio-economics
According to Cassel (1932), Socioeconomic or social economics is an umbrella term with
different usages. 'Social economics' may refer broadly to the "use of economics in the study of
society. More narrowly, contemporary practice considers behavioral interactions of individuals
and groups through social capital and social "markets" (not excluding for example, sorting by
marriage) and the formation of social norms. In the latter, it studies the relation of economics to
social values
2.1.8 Economic development
According Assimwe (2006), economic development is a sustained improvement in people's
standard of living and welfare. It is a measure of quality of life of people. Economic
development involves an improvement in the availability in the basic needs, an increase in the
per capita income, an improvement in the variety of socio-economic indicators such as an
increase in literacy rate, higher life expectancy, and reduction in poverty level, improved health,
more education and others.
2.2 Theoretical foundation of SACCO and Socioeconomic development
The idea of savings and credit as it is known to day originated in German where Fredric W.
Reiffeisen, mayor of flamer’s field, organized a rural savings and credit in 1846. This was a year

13
of economic crisis and famine. His aim was to assist the poor in an attempt to alleviate their
financial problems. He asked them to cooperate by pooling together their meager savings and
lending to each other at a low rate of interest. The idea worked like magic, people worked hard
and the savings and credit society proved success (ACCOSCA, 1980).
In 1885, the idea was introduced to Australia and other countries of Europe where the
institutions were called people’s Bank. In 1892, France picked up the idea and was known as
mutual credit mutual.The idea was introduced In US the idea was known as credit union. Then,
the idea spread to Latin America and Asia (ibid). Credit unions idea was introduced to Africa,
particularly Ghana in 1955 by a White Fathers missionary called Rev. Fr. Macunttly. It was the
first credit union in Africa (ibid). In Rwanda, Savings and credit cooperatives started during the
early days of the colonial period, mainly by religious leaders (Dilenes, 1909).
SACCOS in Rwanda are ones of the institutions in the emerging micro-finance industry
dedicated to serve the financial needs of the marginalized poor people who cannot have access to
financial services of main stream existing commercial banks and other financial institutions.
They are regarded as the way of making the disadvantaged poor households participate in
sharing the national cake through involving them into productive activities which can be
properly devised using other financial services (Shafi, 2001).
2.2.1 Socio-economic development
Socioeconomic development theories can provide a context for understanding the dialectic
changes in the international institutions’ approaches to poverty alleviation. They are four eras of
development theory at the United Nations and its subsidiary organizations. First, what they term
“national state capitalism,” is characterized by a Keynesian approach, initiated by the Bretton
Woods organizations (IMF, World Bank), the goal of which was to create infrastructures for
economic growth. As post- policies, these began to change with a shift away from U.S. economy
hegemony in the 1960s. At this time the UNDP encouraged technical support to low-income
countries to further facilitate growth after it was realized that socioeconomic contribution alone
was not sufficient for human-capital impoverished communities to grow. International
organizations began seeing the north-south economic divide, as well as becoming concerned
about long-term impacts of capitalism on the environment (Forsythe, 2007).

14
According to Forsythe (2007), more specific review is in order of these eras of development
theory one of the first models used to understand how states and regions started on the path to
economic growth was Rostow’s modernization theory. Analyses of European growth after WWII
indicated a fairly rapid and linear trajectory of economic growth that was built on a simplistic
model of saving and investment. According to Rostow’s analysis, modernization takes place in a
series of five stages:
1) Traditional societies eventually start to develop
2) Preconditions for growth, such as increased education, manufacturing, and other forms of
capital development.
3) Take-off stage occurs when the economic norms become established at micro, mezzo and
macro levels, which lead to
4) A drive to maturity characterized by economic diversification and increased standards of
living. The final stage,
5) Is characterized by mass consumption, which drives continued production, technological
development, and job growth.
Rostow assumed the validity of the primary economic model of growth at the time, (which was
the basis for the savings + investment = growth formula. While intuitively attractive (to the
capitalist worldview) and empirically supported at the time, it assumed a linear growth based on
the two isolated variables of savings and investment. While such seemed to be the case in Europe
after the world wars, Europe’s advantage over other regions (like Southeast Asia and Africa), is
that it already had a pre-existing infrastructure, and a population already educated in the skills
and norms necessary for technologized life. Among other factors, it ignores hegemonic
consequences of having military, political and economic power at a state/region’s disposal to
procure capital external to itself (Todaro, 2006).
2. 2.2 Socioeconomic development inductors
According to the Center for Sustainable Systems (2015), standards of living are difficult to
measure, but indicators of socioeconomic development are available. A basic measure, Gross

15
Domestic Product (GDP) per capita, is the value of all goods and services produced within a
region over a given time period, averaged per person. A more advanced metric, the Human
Development Index (HDI), considers life expectancy, education, and GDP. The three highest
HDI-ranked countries in the world are Norway, Australia, and Switzerland.1 Many of the
indicators discussed below are used to measure progress towards the Millennium Development
Goals (MDGs), a set of targets agreed upon by United Nations member states as crucial for
global human progress
 Well-being
Well-being should be considered one of the ultimate aims of society – alongside social justice
and ecological sustainability. By ‘well-being’ we mean people’s experience of their quality of
life. In this section, we aim to break this concept down into component parts; showing how even
‘soft’ outcomes like a change in a person’s well-being can be measured by a social enterprise
 Skills Development
Many social enterprises seek to help people to increase their skills in specific areas, especially
those that are needed in the workplace – such as ‘hard’ skills (learning how to do a particular
job) or ‘soft’ skills ( those related to being part of a workplace, communicating with others, and
personal effectiveness). The end result may be increased attractiveness to an employer and an
increase in self-confidence and well-being. It can therefore be useful to try to capture both
aspects when you decide upon your indicators
 Health
Social enterprises can have both direct and indirect effects on physical and mental health, as well
as on an individual’s private and social behaviors (e.g. substance abuse and preventive measure)
that affect their health

16
2.3 Evolution of Umurenge SACCOs in Rwanda
The ultimate objective of Rwanda’s long term development plan is to transform the country into
a middle-income country and an economic trade, communication and financial hub by the year 2020.
Towards the achievement of this the Government of Rwanda has recently adopted an Economic
Development and Poverty Reduction Strategy (EDPRS), with Financial Sector Development as one
of its key components. (Irma, 2012).
Fin Scope is a research tool which was developed by Fin Mark Trust in an effort to address the need
for credible financial sector information to provide guidance in terms of how to respond to some of
the challenges policy makers, regulators and financial service providers are faced with. It provides a
holistic understanding of how individuals generate an income and how they manage their financial
lives. It also identifies the factors that drive financial behavior and those that prevent individuals
from using financial products and services. The first Fin Scope Rwanda survey was implemented in
2008. This survey showed that 79% of Rwandans, 18 years or older, were not using formal financial
institutions. This meant that a large amount of money remained in people‟s pockets, which not only
limited Rwandans‟ ability to build financial security, but also financial institutions‟ capacity to
distribute credit because of a lack of liquidity (Meehan, 1999).
2.3.1 Services provided by SACCOs
According to Ndangizi (2006), SACCOs offer various products to their members including
shares, savings, emergency loans, loans, life and loan insurance, fixed deposits, educational
savings, housing loans, funeral insurance benefits of SACCOs to members
 SACCOs provide services to small and medium entrepreneurs.
Saving is a financial decision or action of an individual or legal entity to keep part of this of her
surplus funds for the future usage or for interest gains. In their endeavors to offer services to
small and medium entrepreneurs, SACCOs have established suitable and strategic saving
facilities and or micro insurance programs which can provide small and medium entrepreneurs
the means to reduce their vulnerability to risks associated with loans given to them.
 Credit in financial terms means a loan.

17
It is given to an individual or a legal entity, usually after some savings have been made. Loan
repayment installments will include the principle amount and the Interest gained in an agreed
period of time. SACCOs can be used to overcome lack of productive capacity, low self
confidence among small and medium low income earners and hence enabling them to upgrade
themselves.
There however some small problems associated with small loans or small enterprises funded by
loans. For example loans are at times not used efficiently such that borrowers fail to generate
profits from the loans, or even fail to break-even. They thus remain with the burden of repaying
the principle and interest part of the loan even if it did not generate profits. In this case, the
money to repay the loan must come from reduced consumption or it must be borrowed from
other sources usually on worse terms.
A major obstacle to generating profits from loans obtained from SACCOs is that as more people
are given loans to start new businesses most this leads to declining demand, and increases
competition increasing treats to profits.
2.4 Importance of FMI / SACCOs in Socioeconomic development
2.4.1 SACCOs increasing member’s income
SACCO‟s play an important role in lower income groups through increasing their assets via
establishing a credit relationship, establishing an enterprise, accessing working capital,
increasing income through business expansion, meeting housing credit needs and increasing
wealth through savings , among many advantages, there are four primary strengths of SACCO‟s
institutions i.e. savings mobilization, services for lifetime asset growth, mixed outreach, and full
services array of loan products. What distinguishes cooperatives from other non-bank financial
entities involved in SACCO‟s is the ability of mass number mobilization of small, voluntary,
savings account. These deposits can then be invested in rural production, housing, small scale
enterprises and small business loans (Branch, 1999).
According to Cora (1999), SACCOs today emphasizes scale and depth of outreach of financial
services to large numbers of the working poor through financially sustainable organizations.
They offer a saving-first, self-sustainable approach to SACCO‟s that has already successfully

18
met the needs of millions of low-income members around the world. Savings and credit
cooperative organizations encourage savings mobilization especially for the urban poor women.
It is known that savings are key to investment, without them, investments are very hard to be
realized.
The above is confirmed by Magil (1994), that Savings and Credit Cooperative institutions play a
great role in the provision of loan products. Members financing needs determine their credit
union loan products. The borrowers usually access these loans for such purposes like housing
construction, housing improvement, home purchase, small manufacturing, transportation
business, debt financing, emergency needs, education, agriculture, cattle and chicken rising, fish-
harvesting, personal expenses, and electric appliance purchases. Credit cooperative loan
portfolios are widely diversified. Since cooperatives lend for a wide variety of purposes, the
portfolio risk of specializing in a single type of activity is reduced. People obtain credit for
several reasons, which may include lack of school fees for their children, starting a livelihood,
which show the need for credit.
2.4.2 SACCOs in employment creation and production capacity
SACCOs play an important role in facilitating access to credit, procurement and storage, distribution
of input and marketing of products. It is in this regard that cooperatives supplement the functions of
state credit institutions and marketing corporations. In the process of playing these roles,
cooperatives create employment opportunities, particularly in rural areas, and allow disadvantaged
groups to be organized for social and economic benefit (Ilo, 2001).
2.4.3 Asset ownership, education and health care.
According to Sebhatu (2013), the impact of participation in SACCO on member’s assets has been
found in study done in Ethiopia. This research that indicated that 62.5 percent of the sampled
respondents could made additional assets creation in the form of construction of new houses,
repairing old ones, livestock purchase like sheep, goat, cow, oxen, donkey, chicken and purchase of
household equipment like tape recorders, radio, television, chairs, and tables. Hence the overall
impact of the SACCO participation on additional household assets is significant. He further found
that 52.98 percent of the respondents‟ increase their consumption expenditure after joining SACCO.
He concluded that more than half (52.98 percent) of respondents‟ income was spent on the

19
improvement in living standards, like on nutrition, health and education as the results of this study
showed that expenses which have increased are food, health and appliances.
In the same flow, Bashimubwabo (2012), in his research found that SACCOs helped members‟ to
improve their monthly income, to get access to education, to increase positive relationship among
them, to finance their activities and to accumulate wealth and get access to health insurance which
improved their health, to increase their financial literacy and skills in project management as well as
in financial planning. However, this research has not been able to test statistically the significance of
the impact of SACCOs on the members‟ SES, as it has used the qualitative approach and this makes
different to the current study that will employ the quantitative research and hypotheses will be tested
statistically and functional model will be established via SPSS.
According to Rogaly (1997), studied the impact of microfinance intervention in Union Regional de
Apoyo Campesino (URAC) an MFI in Mexico and concluded that URAC‟s flexible savings facilities
are appreciated by its members and used to support a wide range of livelihood needs including food
purchases, emergency health care, and insurance for periods of unemployment. Thus, the services
have demonstrated their usefulness and relevance to members and enabled them both to protect and
improve their livelihoods. This study also showed that borrowers have been initially successful but in
the long run face a downturn terms of ownership of asset and level of income, 69% of dropouts
resulted from inability to pay their installments due to loss in income generating activity.
2.5 Status of MFIs /SACCOs in Rwanda
The licensing of SACCOs is an instant way in creating confidence and should be done by the
government to ensure the best practices. In Rwanda at present the co-operatives are first registered by
the RCA following technical advice by the central bank. Any co-operative Interested to operate as a
SACCO they have to apply for license from the central bank. The SACCOs are therefore under
double regulations/authorities (Central Bank and co-operative agency). Although, it is not suggested
to bring any legal changes in the frame work of operations, it is important to streamline the
procedures and the requirements that SACCOs have to fulfill under these 2 bodies and harmonize the
reporting system. The co-operative agency should take the lead to ensure this as soon as possible
(MINECOFIN, 2009).
SACCOs are even supervised under Microfinance Law No 40/2008 of August 26, and the
implementing regulation No 02/2009,6 which govern the organization of microfinance activities.

20
There is no specific regulation for SACCOs as a microfinance institution, but there are specific
provisions for SACCOs in the Microfinance Law and implementing regulation. The National
Bank of Rwanda has a dedicated department for the supervision of microfinance institutions
housed within the Financial Stability Directorate, parallel to the Department of Banking
Supervision and the Department of Non-Bank Financial Institutions Supervision, which includes
insurance and pension companies (AFI, 2014).
For the period under review, the Microfinance Supervision Department has 77 inspectors, 60 of
which are newly recruited by NBR and stationed in districts near SACCOs. This has revealed the
cost of investing in financial inclusion as a public good. However, in the medium to long term,
the NBR plans to devise a supervisory model that relies on a smaller number of inspectors (AFI,
2014).

21
CHAPTER THREE: METHODOLOGY
3.1 Introduction
This chapter presents, explains and justifies the methodology used in order to fulfill the
objectives of the study and this chapter gives reasons why data was collected, from where data
was collected, and how data was collected and analyzed. The chapter also provides data analysis
methods adopted during the study.
3.1.1 Study area
The study looked at Umurenge SACCO operating in Eastern province, Ngoma District, Rurenge
3.1.2 Population of study and sample size determination
The study sought to evaluate the impact of USACCOs activities on members‟ socioeconomic
development in Eastern province Ngoma District, Rurenge Sector. Hence the population under this
study involved 5496 members /registered
According Grinnell and Williams (1990), the sample size for this study was determined using the
Slovin’s formula n= N/ (1+Ne2) whereby n: is the sample size, N: is the total population, e: is the
margin of error, Remember that for this case N= 5496 taking the confidence level of 90% that is
with a permissible error of 10%, e=0.1. Therefore, n=5496/1+5496 *(0.1)2 this gives
5496/1+5496*0.01=5496/1+54 = 5496/55 = 98.2 roughly equals 100 respondents
3.1.3 Sampling techniques
The researcher used purposive sampling to select people to include in the sample. The main
characteristic of random sampling is that it is a type of non-probability sampling in which people
with a particular characteristic are purposively selected for the inclusion in the sample.

22
Table 3.1.4: Distribution of the population of the study and the sample size per cell
RURENGE
SECTOR
Cells Males Females Total members
Number Sample
RPRURENGEPEOPLE
SACCO
RUGESE 579 474 1053 19
RWIKUBO 394 463 857 16
AKAGARAMA 440 446 886 16
MUSYA 448 350 798 14
RUJAMBARA 602 418 1020 19
MUHURIRE 501 381 882 16
TOTAL 2964 2532 5496 100
Source: R P SACCO Monthly report, June, 2015
3.2 PROCEDURES TO BE ADOPTED IN THE COLLECTION OF DATA
3.2.1 Sources of Data
The methods adopted for collection of necessary and valuable data for this research report are mainly
drawn from primary data and secondary data
3.2.2 Primary Data
The primary data were collected from relevant customers of Rurenge People SACCO by using
personal questionnaire.
3.2.3 Secondary data
Secondary data were extracted from different sources namely, Rwanda cooperative agency report,
micro-economic framework of Rwanda, libraries and internet. In this perspective, the study opted to
use the existing data that depicted the knowledge of the study Secondary data were gathered from
published Rurenge People SACCO annual reports

23
3.2.4 Data collection techniques
To carry this study a variety of tools have been used, as practical means of obtaining information
related to the research topic. The research focused mainly on documentation, questionnaire, and
interview as techniques of data collection.
3.2.6 Questionnaire
The questionnaires have been designed and distributed to respondents so as to get the needed
information. The tool helped the researcher to present questionnaires.
3.2.7 Observation technique
Observation method: This has provided the means of verifying information answered in the
questionnaires and a detailed understanding of values, motives and practices of the respondents. With
the aid of this method, this research was able to draw comparisons among respondents from 6 cells
that were used in the study.
3.2.8 Interview
The structured interview schedule was used to provide a framework of key Point on the topic around
which investigative discussion was built. The researcher has only conducted an interview with staff
members of Rurenge People SACCO
3.2.9 Documentation
These consisted of reading textbooks providing several related literature, various reports and journals
with information related to financial statement and financial statements analysis. Financial
documents like the balance sheet and other relevant documents concerning Rurenge People SACCO
were also consulted
3.2.10 Data analysis method
The entry and analysis of data was done using SPSS (Statistical Package for the Social Scientists)
where linear function model has been formulated to help assess the impact of the extraneous
variables and independent variables on the dependent variable
Compound annual growth rate (CAGR), Analysis of Variance (ANOVA), Paired samples t -Test and
frequency distribution were employed to assess the impact of independent variable on the dependent
variable and assess the significance of the entire model

24
3.2.11 Processing and interpretation of data
Data from questionnaires has been compiled, sorted, edited, classified and coded into a coding sheet
and analyzed using a computerized data analysis package known as Statistical Package for Social
Science 16.0.
3.2.12 Data processing
Data collected was transformed into meaningful information for easy interpretation and
understanding.
3.2.13 Editing
During this research editing has been made to prove clarity, accuracy, uniformity, consistency and
complexness in data collection.
3.2.14 Tabulation
Tabulation of data was done using tables showing frequencies of responses and the use of tables has
helped in analysis of data.
3.2.15 Quality control
The researcher has picked the recommendation letter from the school of Economics at University of
Rwanda College of business and economics and starts his investigation at Rurenge People SACCO
operating in Ngoma District. Besides, effective book keeping is considered as a competitive edge by
various small business enterprises and therefore the information gathered was sensitive. The
researcher ensured that the information gathered was solely used for the intended purpose and that it
was treated with utmost confidentiality

25
CHAPTER FOUR: DATA ANALYSIS, PRESENTATION AND INTERPRETATION
OF THE FINDINGS
4.1. Introduction.
This study focuses to present and interprets the results obtained during analysis of data collected
from different sources in order to assess the impacts of Umurenge SACCO programme on
socioeconomic development of Rwandan people.
In this chapter, we described the population’s background, the dependent and independent
variables and analyze the hypotheses. Furthermore, Descriptive statistics, paired sample t-test
and linear regression analysis model were used to test the relationship between response variable
and predictor’s variables. The data are analyzed using the Statistical Package for Social Sciences
(SPSS version 16.0).
4.1.1 PRESENTATION AND INTERPRETATION OF THE RESULTS
4.1.2. Distribution of respondents
The table below shows that the majority of the respondents 59% were female, 41% male and 38
percent of respondents fall between 30-45 age group, about 25% were in 45-60 and16-30, this
implies that the majority of respondents were adults who are head of their families. Reasons are
clear as these people are active and working hardly for their family members; therefore they have
to save for the future and request loans from SACCOs to enable them starting or empowering
new or existing projects. People whose age is over 60 years are few because most of them they
are old people who have no energy to work. Moreover, Most of them were retired and hence do
not have much to save and have accomplished their family duties.
In addition to that, the premier number of respondents 30% have done secondary, 26% from
university, 14%of respondents have completed Primary level, and 11 % have done vocational
training This implies that the majority of members of SACCOs did their studies, meaning that
based on the theory on Socioeconomic development, members of SACCOs in Rurenge sector
have socioeconomic development that depends on one’s education background. About 68% of
respondents were married, 19% single and 12% were divorced during the time of data collection.

26
This shows that the most of the members of Umurenge SACCOs in Rurenge sector are married
people, this reflects the reality as people who are married are the most likely hard workers,
savers, borrowers and investors in the community because they want to satisfy the needs of their
families and wish to earn more and save for their children. Furthermore, the higher proportion of
respondents (53%) were employed in Agriculture, 32%Businessman, 9% were employed in
private organization and about 6% were state agents. This indicates that Rurenge People
SACCO’s have been approached by people from various sectors but mainly by Farmers.
Table 4.1.3: Characteristics of Rurenge People SACCO members in Ngoma district
Characteristics Frequency percentage
Gender
Male
Female
41
59
41
59
Age of respondents
16-30
30-45
45-60
>60
25
38
25
12
25
38
25
12
Education level
Illiterate
Primary
Secondary
TVT
University
19
14
30
11
26
19
14
30
11
26
Marital status
Single
Married
Divorced
19
69
12
19
69
12
Occupation
Agriculture
Business
Government employee
53
32
6
53
32
6

27
Private 9 9
Membership duration
<2
2-3
3-4
83
11
6
83
11
6
Total 100 100
Source: Data collected in Ngoma district, Rurenge sector (Rurenge People SACCO).
4.2. DESCRIPTIVE STATISTICS OF VARIABLES
Descriptive statistics are a set of brief descriptive coefficients that summarizes a given data set,
which can either be a representation of the entire population or a sample. The measures used to
describe the data set are measures of central tendency and measures of variability or dispersion
(Jackie, 2006).
The data Presentation put emphasis in general to background and characteristics of respondents.
For the researcher, to present research findings and interpretation, percentages were as a mean to
analysing and interpretation of data. Responses were collected a sample of 100 members of
RURENGE PEOPLE SACCO in Ngoma district and the study was believed enough to give
adequate results. Data collected through questionnaire, interview and documentation were
complementary for looking information to the objectives of the research. The descriptive statistics
were used to present the frequency, minimum and maximum values included in the analysis,
mean statistics, variance and standard deviation which tell us how values deviate from the mean.
The table below shows that the mean monthly income before getting a loan is 71229, 103235.4
after getting a loan and about 42 as mean age and number of observations are 100.

28
4.3 Evolution of savings in Rurenge People SACCO from 2011 to 2015
According (CRUMMETT, 1983).The evolution of savings in Rurenge People SACCO was
computed using “Compound annual growth rate” (CAGR), which is a useful measure of growth
over multiple time periods. It can be thought of as the growth rate that gets you from the initial
investment value to the ending investment value if you assume that the investment has been
compounding over the time period. Furthermore, the concept of CAGR is relatively
straightforward and requires only three primary inputs: an investment’s beginning value, ending
value, and the time period. The CAGR represents the growth rate of an initial investment
assuming it is compounding by the period of time specified.
Specifically, the formula is:
1
/1







n
PV
FV
CAGR
Table 4.2.1 Descriptive Statistics
N Range Minimum Maximum Mean
Std.
Deviation Variance
Statisti
c Statistic Statistic Statistic Statistic
Std.
Error Statistic Statistic
age 100 51 21 72 41.76 1.335 13.348 178.164
Monthly income
before getting
loan.
100 369800 10200 380000 7.12E4 9287.175 92871.754 8.625E9
Monthly income
after getting the
loan.
100 470000 10000 480000 1.03E5 1.317E4
131715.61
4
1.735E10
Valid N
(listwise)
100

29
077.0
1)5/1()^7122900/10323540(


CAGR
CAGR
Where, CAGR: Represents Compound annual growth rate
FV: Future amount of savings
PV: Present amount of savings and
N: number of years.
Secondary data on saving in Rurenge People SACCO from 2011 to 2015 were used to compute
the compound annual growth rate (CAGR), using excel software and results shows that the
CAGR is about 7.7%.
4.4 Socioeconomic status of Rurenge People SACCO members before and after joining
SACCO.
Here is the output of results of paired sample t-test which used to determine whether two
dependent samples were selected from populations with the same distribution, in order to test if
these samples are dependent of each other the hypothesis should be made as follows:
Monthly saving before and after joining Sacco are the same
Monthly savings before and after joining Sacco are different.
Where, Ho: represents Null hypothesis and Ha: Alternative hypothesis.
Thus in order to test the above statement, we use the probability values (P-value) which is the
probability that helps to make decision on how to reject or accept the null hypothesis.
Based on level of significance (α) which is equal to 10%, reject null hypothesis if P-value is less
than α otherwise accepts. In the table below the p-value (0.000) is less than level of significance
(0.1), reject Ho. Therefore there is enough evidence at 10% to conclude that the monthly savings
before and after joining Rurenge People SACCO are different.
:
:0
H
H
a

30
The above table of correlation shows that the monthly income before and after getting loan from
SACCO are strongly correlated about 92 percent and monthly income was treated as a measure
of socioeconomic status.
Table 4.4.2: Paired Samples Test of monthly income before and after
Paired Differences
t df
Sig. (2-
tailed)Mean
Std.
Deviation
Std. Error
Mean
90% Confidence Interval of
the Difference
Lower Upper
Pair
1
monthly
income
before
- monthly
income after
-
3.201E4
57974.592 5797.459 -4.163E4 -2.238E4
-
5.521E0
99 .000
Table 4.4.1: Paired Samples Correlations table
N Correlation Sig.
Pair 1 monthly income before
getting loan from
UMURENGE SACCO &
monthly income after getting
the loan from UMURENGE
SACCO
100 .924 .000

31
4.5 The contribution of Rurenge People SACCO to the improvement of life conditions of its
members
In order to assess the contribution of Rurenge People SACCO members on socioeconomic
condition of its members, frequency distribution table was used to describe the improvement in
life condition among its members. As shown in the table below, the majority of respondent
(24.5%) of them respond that Sacco services help them to pay school fees, about 12% of
respondents was able to start small business and get meal which improve their daily life
conditions, about 13% was able to buy asset such as bicycle and motorcycle, approximate 13%
able to pay medical bill and buy health insurance and 20% also was able to buy radio, television
because of Sacco services.
Table 4.5.1. Contribution of Rurenge People SACCO to improvement of life condition of its
members
Life conditions Responses Percent of
CasesN Percent
I am able to pay school fees because of services i got
from Umurenge SACCO
86 24.5% 86.0%
I am able to pay medical bill and buy health insurance
because of the services i got from Umurenge SACCO
45 12.8% 45.0%
I was able to start a small business and improve the
existing business because of services i got from
Umurenge SACCO
43 12.3% 43.0%
i was able to buy asset and means of Transport
(Bicycle, Motorcycle) because of services i got from
Umurenge SACCO
46 13.1% 46.0%
I am able to get meal twice a day satisfactorily
because of the services i got from Umurenge SACCO
60 17.1% 60.0%
I was able to buy a Radio ,Television because of the
services i got from Umurenge SACCO
71 20.2% 71.0%
Total 351 100.0% 351.0%
Source: Primary data 2016

32
4.6. Challenges facing Rurenge People SACCO members
To implement the goals and objectives of SACCO, implementers have met some challenges.
The challenge was inadequate to financial product (16.4%), this challenge is followed by the lack
of adequate infrastructure (17.0%), high interest rate which was seen by (16.7%) of the
respondents. Other challenges are Limited menu of product (16.7%), outdated payment system
(13.9%), and Governance weakness in monitoring and evaluation of Sacco’s activities about
(19.2%).
Table 4.6.1 Challenges facing Rurenge People SACCO members
Challenges Responses Percent of Cases
N Percent
Inadequate financial product 53 16.4% 53.0%
Governance weakness 63 19.2% 63.0%
Outdated payment system 45 13.9% 45.0%
Limited menu of product 54 16.7% 54.0%
High Interest rate 54 16.7% 54.0%
Lack of adequate infrastructure 55 17.0% 55.0%
Total 323 100.0% 323.0%
Source: Primary data 2016
4.7 Interpretation of the results
As it is shown by the results above Rurenge People SACCO has achieved widely objectives. AS
this was concerned by increasing the rate of services it provide to its members, namely to
provide loan, to improve living standards among Sacco members as was shown above Rurenge
People SACCO contribute positively to the improvement of socioeconomic status of its members
trough health sector, education sector and economic sector as well. This contribution is the
results of efforts given by the state and programs which were put in place to reduce poverty level
at a sector level through setting up the microfinance institutions

33
CHAPTER FIVE: DISCUSSION OF THE RESULTS
This chapter clarifies the results of the investigation and compares and contrasts them with existing
theory and findings. It then relates the findings to prior assumptions and expectations and describes
the extent to which these either support or refute findings of the current study. The results are also
discussed and interpreted and their applicability to the original research problem is explained in this
chapter. This chapter shows the extent to which the study has fulfilled its objective.
5.1 The findings on evolution of savings in Rurenge People SACCO from 2011 to 2015
Secondary data on saving in Rurenge People SACCO from 2011 to 2015 were used to compute
the compound annual growth rate (CAGR), using excel software and results shows that the
CAGR is about 7.7%.
5.2 The findings on socioeconomic status of Rurenge People SACCO members after and
before joining Umurenge SACCO
Probability values (P-value) which is the probability that helps to make decision on how to reject
or accept the null hypothesis. Based on level of significance (α) which is equal to 10%, reject
null hypothesis if P-value is less than α otherwise accepts. As shown in table 4.4.2 the p-value
(0.000) is less than level of significance (0.1), reject Ho. Therefore there is enough evidence at
10% to conclude that the monthly savings before and after joining Rurenge People SACCO are
different
5.3 The Findings on the contribution of Rurenge People SACCO to the improvement of life
condition of its members
The contribution of Rurenge People SACCO members on socioeconomic condition of its
members, frequency distribution table was used to describe the improvement in life condition
among its members. As shown in the table 4.5.1, the majority of respondent (24.5%) of them
respond that Sacco services help them to pay school fees of their children 20.2% of respondents
was able to buy radio, television ( 17.1%) were able to get meal which improve their daily life
conditions, (13.1)% was able to buy asset such as bicycle and motorcycle, and (12.8%) of
respondent were able to buy medical bill and health insurance ,final (12.3%) were able to start

34
small business and Besides, the quantitative analysis of data has showed a positive correlation
between activities of USACCO and SED of Rwanda.
5.4 The Finding on Various challenges facing Rurenge People SACCO members
To implement the goals and objectives of SACCO, implementers have met some challenges.
As shown in table 4.6.1 The major challenge was Governance weakness in monitoring and
evaluation of Sacco’s activities (19.2%), this challenge is followed by lack of adequate
infrastructure which was seen by (17.0%) of the respondents, and inadequate to financial product
was seen by( 16.4%) of respondent , High interest rate their respondent were (16.7%) Other
challenges are Limited menu of product characterized by (16.7%), final outdated payment
system was (13.9%) of respond , besides, the quantitative analysis of data has showed that Number
of challenges arose as the Umurenge SACCO Program was implemented and Umurenge SACCO
had to find appropriate ways to respond.
5.2 Conclusion
Based on the findings, the researcher has been able to achieve the objectives of the study and
concluded that the Umurenge SACCO has impacted the socioeconomic development of Rwanda
The study has showed that USACCOs‟ services such as credit and saving have positive impact
to their members Rurenge People SACCO has helping them to increase their monthly income,
assets owned, investment portfolio, access education, take children to schools, pay medical bill,
and improve housing/shelter.
5.3 Limitations of the study
Though the data collection exercise was expected to be easier, some limitations were
encountered whose solutions were sought in order to get the reliable findings of this study.
The researcher and respondents‟ timetable were not matching. Thus the limitations encountered
during this study resulted from the nature of the population under the study. Respondents were so
busy at their work and for the researcher to access the respondents involved a lot of energy. Even
after an audience has been granted, it took long time to get answered questionnaires from
respondents. But the researcher has tried her best to get out of this challenge by frequent

35
reminding without disobeying. Thus all these challenges were overcome without hindering the
quality findings expected from this study
5.4 Recommendations
The presence of Rurenge People Savings and Credit Co-operative Societies (SACCOS) that
people readily accessible financial services to their economically active poor households
(members) has been singled out from this study as the best tool in reducing poor conditions to
the low – income segment of the population in the area. Rurenge People SACCO however is still
in their infancy, taking into consideration the evasive changes and competitions with other MFIs,
whose business from sections target the general public on similar financial services. Based on the
findings the researcher has formulated recommendations to three major categories namely: the
management of Umurenge SACCO, to the government of Rwanda and to the Members of
Umurenge SACCO.
5.4.1 To the management of Umurenge SACCOs
The study recommends that USACCO should try to minimize the challenges that prevent people
from accessing loans by encouragement group lending methodology where members of a group
guarantee themselves and get loan without further collaterals, by accepting as many kind of
collaterals as possible, lowering the interest rate charged on loans, improve the service delivery,
fair terms of repayment (extending the repayment period, reduce the charges to the minimum,...)
Increase saving and capital mobilization to get sufficient loanable fund so as to give out a large
amount of loan, avoid corruption and establish more branches to approach members located very
far from their main offices ,
The requirements for a member to open accounts were found to be complicated and difficult
comparing to commercial banks requirement, where an account is opened freely, hence these
requirements may be limiting factor that prevent members from joining USACCO, therefore, the
management of USACCO should look at how to easy these requirements for a member to open
an account.

36
5.4.2 Members Savings Development
The principal services offered are demand deposits savings, shares savings and micro credits
savings. This means that, RP SACCO interviewed do not offer reciprocity savings services for
lending purpose. It is recommended that Rurenge people SACCO should encourage savings
mobilizations from members so as to build a financial base for credits provision.
To achieve this segregation of financial saving services need to be categorized as follows:-
 Share saving services none-withdrawal
 Reciprocity saving (for lending purpose also none withdrawal.).
 Demand deposits saving services (for regular withdraw).
 Time deposits savings service ( to be introduced)
 Savings for education fees (to be introduced).
5.4.3 Credits administration
This entails that loan portfolios in RP SACCOS that can produce high yield on interest from
those loans. Savings and Credit Co-operative Societies (SACCOS) do mainly advances financial
services loans to their members for various economic and business enterprises. It is therefore
recommended that Rurenge people SACCOS should design a qualitative tailor- made loans or
credits products with special repayment terms, for more or successful performance financial
services provided is of different purposes and this may include the following areas.
 Emergences (short-term) liquidity i.e. Personal loans, not affected existing long term loans.
 Students’ education loans.
 Home improvement loans.
 Loans for raw material and stock purchases for small – scale business men:
5.4.4 Mortgage of Savings Vis – a – Vis – Micro credits.
The recommended conditions for micro credits within RP SACCO are rigid and restrictive.
Generally it involves physical possession of collateral as among the main criteria for their
prospective members to qualify for loans, but individual members do not have security since
their family plots and buildings cannot be encumbered.

37
5.4.5 Marketing of Financial Services
In order for Rurenge People Savings and credit cooperatives (SACCO) to succeed in their
missions, members need timely and correct information because it is only on the basis of this
enlightenment that they can trust the management organs and in turn use the information to make
sound decisions as well as assisting in marketing their SACCO services to members and other
non members. To achieve this, Rurenge People SACCO is respectively need to look for a
concerted publicity efforts (marketing campaigns), which may include marketing new products
or re- launching old ones as to capture savings and protect them as well, this will encourage
many members to join and participate more and contribute to the growth of the Cooperatives
Societies, hence secure more financial services.
5.4.2 To the government of Rwanda
The study has found that UMURENGE SACCO has positively impacted their social economic
development. The government should therefore, subsidize loans for poor people to make the
loans more affordable for clients, assist SACCOS in saving mobilization to increase loanable
fund, assist SACCO in training members on loan utilization, saving culture and business
management, create more jobs to empower members through government expenditure in public
works, and subsidize SMEs and other small income generating activities.
5.4.3 Suggestion for further Researchers
During the study, the researcher did not investigated all relevant questions, therefore, the
researcher suggest relevant questions that could involve further research that surpasses the scope
of the current investigation. The following are areas that need further investigation: The access to
finance and performance of Small and Medium Enterprises, the Information Communication and
Technology and the performance of Umurenge SACCO.

38
REFERENCES
Abebe T (2006). Impact of microfinance on poverty Reduction in Ethiopia .Addis Ababa: Addis
Ababa University press.
Asmelash K (2003).The Impact of Microfinance on the performance of Small and Medium
Enterprises in Ethiopia. Addis Ababa: Addis Ababa University press.
Sharma S (2004). Strategic management of cooperative. Burlington: Universty of Vermont
Bailey T (2001). Applying international best practices to South Africa's SACCOs. Pretoria: De
Mont fort University press.
Kafle T (2012). The impact of SACCO in Ofla Wered Tigray Region of Ethiopia: Kampala:
Makelle University press.
Yasuhiko Y (2011). The Current Situation of Microfinance in Bangladesh .Dhaka. University of
Bangladesh.press.
Nwobi T (2006). Service Co-operative and Management in Readings in Co-operative Economics
and Management. Lagos: Computer Edge Publishers Enugu.
Tayebwa B (2007). Basic Economics, 4thed. Kampala: Makelele University press.
Hulme D and Mosley P (1996). Finance against Poverty on Effective Institutions for Lending to
Small Farmers and Micro-enterprises in Developing Countries. London: Rutledge press,
MINECOFIN (2006). National Policy of Microfinance in Rwanda. Kigali. MINECOFIN report.
Meehan F 1999.The Impact of Credit Provision by the Dedebit Savings and Credit Institution on
Economic Activity and Household Income in Tigray. Kampala: Makelele press.
Robinsons S (2001). The Microfinance Revolution Sustainable Finance for the Poor. Washington
D.C: World Bank report.

39
APPENDIX 1: QUESTIONNAIRE
Dear respondent, my name is Jean d’Amour NKAKA; I am conducting a research on the impact
of SACCOs to the socio-economic development in Rurenge sector as a partial fulfillment of the
requirement for the award of a Bachelor’s Degree in science of economics at University of
Rwanda -College of Business and Economics.
The questionnaire items are about the study and I kindly request you to participate in responding
to the questions below to help me getting the information needed in my research. The
information given will be treated as confidential and the results of the study will be used for
academic research purposes only
SECTION ONE: BACKGROUND OF THE RESPONDENT
Please tick your personal information in the gaps below
Personal information
Sector…………., Cell…………………..
Male …………….. Female…………
Age: Below 16……… 16-30…………. 31-45………… 45-60……….. Above
60…………
Marital Status: Single ……… Married …… Divorced……….
Level of Education: Illiterate……..Primary……..Secondary………TVT………
University……………
Household information
Are you responsible? Yes……….. No……
If yes, How many members of your family..........
Occupation:

40
Farmer……… Business………… Government employee………
Private employee ………..
Any other specify..........................................................................
SECTION TWO: CONTRIBUTION OF SACCO TO SOCIOECONOMIC
DEVELOPMENT OF RWANDA
For how long have you been a member of Umurenge SACCO?
2010……. 2011……. 2012..... 2013….
2014……………. 2015……..
Have you ever awarded a loan from Umurenge Sacco? Yes……. Not……
If not why....................................................................................................
If yes, How many times……………………………………………………
If yes, what was the purpose of that loan …………………………………

41
Tick what has Rurenge people SACCO served to your family?
How was your monthly income after getting loan from Umurenge SACCO
…………………………………......
How was your income before getting loan from Umurenge SACCO below 30000……….
(30000-5000)………….. (50000-70000) ……………. (70000-90000)………. (90000-
110000)…….
Above 110000………………
Contribution of Rurenge People SACCO to the improvement of
life condition of its members
Yes No
I am able to pay school fees because of services I got from Umurenge
SACCO
I am able to pay medical bill and Buy health insurance because of the services
I got from Umurenge SACCO
I was able to start small business or improve the existing business because of
the services I got from Umurenge SACCO
I was able to buy asset like means of transport (Bicycle, Motorcycle………..)
I am able to get a meal twice a day satisfactorily because of the services I got
from Umurenge SACCO
I was able to buy a radio and television because of the services I got from
Umurenge SACCO

42
How was your income after getting loan from Umurenge SACCO below 30000……….
(30000-50000)………….. (50000-70000) ……………. (70000-90000)……….(90000-
110000)…….
Above 110000………………
Judge the services and role of Umurenge SACCOs to members (tick in one case only)
Excellent……… ………..Good………………….Poor……………….
b) If poor, explain briefly why? …………………………………………
SECTION THREE: CHALLENGES FACED BY RURENGE PEOPLE SACCO
MEMBER
Tick among of this challenges faced challenges faced by Rurenge People SACCO members?
Challenges Yes NO
Inadequate financial product
Governance weakness
Outdated payment system
Limited menu of product
High Interest rate
Lack of adequate infrastructure

43
APPENDIX 2
Interview guide with managers and chairman of the board of directors
1. What services does your Umurenge SACCO offers
2. What are requirements for a member to open an account in your SACCO?
3. How many clients have been registered in Rurenge People SACCO from 2011 to 2015?
4. How is evolution of saving in Rurenge from its creation till to 2015?
5. In your own observation how do you see the contribution of your SACCO to the members‟
welfare?
6. What are the challenges does your SACCO face that prevents you from satisfying your members?
APPENDIX 3 Ngoma District Administrative Map

Impacts of umurenge sacco programme on socioeconomic development of rwanda

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