This study examines the contribution of saving and credit cooperatives (SACCOS) on the improvement of members’ socio economic development in Rwanda. The appearance of saving and credit cooperatives or credit unions has been known as remedy for social ills rooted in poverty because of its efficiency in loans or credits dispensation, social equality for enhancement and reduction of poverty among low income earners. Therefore, millions and millions of poor people and non-bankable in developing countries (or third world countries) have been provided access to formal financial services through saving and credit cooperatives’ programs.
The targeted population concerned by the study was 1,940 members of USACCO from which a sample of 92 respondents was purposely selected. The study has adopted a combination of correlation and descriptive research design. It has employed both quantitative and qualitative approaches. The study used both primary and secondary data. The primary data was collected using questionnaire and interview and, while secondary data was collected using documentations techniques whereby, Manual of procedures and Credit policies of USACCO and financial reports have been consulted. The analysis of data was done using SPSS version 21.
Table of Contents
CHAPTER ONE
GENERAL INTRODUCTION
1.1. Background of the study
1.1.1 Historical background of Umwalimu SACCO and SACCOs in general
1.1.2 Conceptual background
1.1.3 Contextual background
1.2. Statement of the problem
1.3. Objectives of the study
1.4. Research questions
1.5. Significance of the study
1.6 Justification of the study
1.7. Scope of the study
1.7.1 Geographical scope
1.7.3 Time scope
1.8. Thesis structure or organization
1.9. Operational definitions
CHAPTER TWO
LITERATURE REVIEW
2.0. Introduction
2.1. Definitions of key concepts
2.1.1. Micro-finance
2.1.2. SACCO
2.1.3. Umwalimu SACCO
2.1.4. Cooperative
2.1.5. Savings
2.1.6 Loan
2.1.7. Socio-economic development
2.1.8. Development
2.1.9. Growth and development
2.2. Theories on microfinance: saving and credit cooperatives
2.3. Saving and credit cooperatives’ literature review
2.3.1. The Role of Cooperative Societies in Economic Development
2.3.1.1 Economic Role of microfinance cooperatives
2.3.1.2. Social role of microfinance cooperatives
2.3.1.3 Political Role of microfinance cooperatives
2.3.2. Importance of cooperatives to members
2.3.4. Objectives of saving and credit cooperatives
2.3.5. Cooperative Principles
2.3.6. Services offered by saving and credit cooperatives
2.3.7 Type of services offered by Umwalimu SACCO
2.3.7.1. Saving services
2.3.7.2. Loan products
2.3.7.3 Trainings on Business Management game
2.3.8. SACCOs and MFIs’ lending Methodology and policies
2.3.8.1 Group Lending
2.3.8.2 Individual Lending
2.3.8.3 Credit Unions
2.3.9. Lending Conditions
2.3.10. Advantages and benefits of SACCOs
2.3.11. Challenges faced by SACCOs
2.3.12. Empirical studies
2.3.12.1. Empirical literature review of saving and credit cooperatives worldwide
2.3.12.2. Rwanda’s empirical research on saving and credit cooperatives (SACCOs)
2.4. Conceptual Framework
2.5. Hypotheses of the Study
2.6. Chapter conclusion
CHAPTER THREE
OVERVIEW ON FINANCIAL SYSTEM AND
MICROFINANCE ACTIVITIES IN RWANDA
3.0. Introduction
3.1. The country overview
3.1.1 Demographics and Political Situation
3.1.2 Rwanda’s Macroeconomic conditions
3.2. Overview of Rwandan’s financial sector
3.2.1. The financial system in Rwanda
3.2.1.1. The banking sector
3.2.1.2 The microfinance sector
3.2.1.3. The Non-Bank Financial Institutions
3.2.2. Banking sector
3.2.3. The Soundness of the Banking Sector
3.2.4. Banking Sector achievements (opportunities) and challenges
3.3. Microfinance development in Rwanda
3.3.1. History of Rwanda’s Microfinance
3.3.2. Types of Microfinance Providers
2.3.5. Financial cooperatives in Rwanda-
3.4. The Role of Rwanda’s Government in Microfinance
3.5 Legal and regulatory framework of Microfinance in Rwanda
3.6. Microfinance in Europe
3.7 Chapter conclusion
CHAPTER FOUR
RESEARCH METHODOLOGY
4.0 Introduction
4.1. Description of the study Area
4.1.2. Rwanda map with districts-
4.2. Research design
4.3. Population of the study and sampling technique
4.3.1. Population
4.3.2. Sampling technique
4.3.3. Sample size
4.4 Data Collection sources and instruments
4.4.1. Data collection sources
4.4.1.1 Primary Data
4.4.1.2 Secondary Data
4.4.2. Data collection instruments
4.5. Validity and Reliability of data
4.6. Data Analysis
4.6.1 Data analysis techniques
4.6.2. Analysis model specification and criteria
4.6.3. Estimation and evaluation of the model
4.7. Data Processing
4.7.1. Data Coding
4.7.2. Data Tabulation
4.8. Ethical Consideration
4.9. Dissemination of Results
4.10. Summary of the chapter
CHAPTER FIVE
DATA ANALYSIS AND INTERPRETATION OF RESULTS
5.0. Introduction
5.1. Socio- demographic characteristics of the respondents
5.1.1. Distribution of respondents by Age group
5.1.2. Distribution of respondents by gender
5.1.3. Distribution of respondents by marital status
5.1.4. Distribution of respondents by educational levels
5.1.5. Distribution of respondents by occupations
5.1.6. Distribution of respondents by size of dependents
5.1.7. Findings on membership duration of respondents
5.1.8. Membership condition
5.1.9. Findings on Umwalimu saving facilities
5.1.10. Respondent view toward SACCO loan facilities
5.2. Contribution of USACCO activities on the improvement of teachers’ welfare.
5.3. Respondents’ type of Income generating activities established after joining USACCO
5.3. 1. Respondents’ type of farming business established after joining USACCO
5.3. 2. Respondents’ type of commerce established after joining USACCO
5.3. 3. Respondents’ type of transport business established after joining USACCO
5.3. 4. Respondents’ house renting business established
5.4. Respondents’ level of income before and after joining USACCO
5.4.1Respondents’ income before joining SACCO
5.4.2 Respondents’ income after joining SACCO
5.5. Contribution of government programs’ on the improvement of teachers’ welfare
5.6. Testing of other hypotheses
5.6.1. Correlation between USACCO services and the members level of income
5.6.2 Correlation between USACCO services and improvement of member’s standard of living
5.7. The relationship between USACCO services and the standard of living improvement of members.
5.8. Standard of living of respondents after Joining Umwalimu SACCO
CHAPTER SIX
SUMMARY, CONCLUSION AND RECOMMENDATIONS
6.0 Introduction
6.1 Summary of the major findings
6.2.1 Summary of findings related to the type of contributions generated by USACCO activities (services) to its members.
6.2.2 Summary of findings related to the contribution of small income generating activities established by members to their standard of living, as results of becoming USACCO members
6.2.3 Summary of findings related to the relationship between USACCO’s services and the socio-economic development improvement of beneficiaries
6.2. Conclusion of the study
6.3. Recommendations of the study
6.3.1. Recommendations to USACCO members
6.3.2. Recommendations to the management of Umwalimu SACCO
6.3.3. Recommendations to government and other stakeholders
6.4 Proposals for further research
Objectives and Research Themes
This thesis examines the role of Umwalimu SACCO in enhancing the socio-economic development of primary and secondary school teachers in the Huye District of Rwanda, specifically focusing on how access to financial services influences their living standards, income, and asset ownership.
- Impact of USACCO financial services on teacher income and welfare.
- The effectiveness of small income-generating activities supported by SACCO loans.
- The role of socio-demographic factors in socio-economic improvement.
- Challenges faced by teachers and the SACCO in achieving sustainable development.
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1.1. Background of the study
The study seeks to assess the contribution of saving and credit cooperatives organizations (SACCOS) on the improvement of members’ socio economic development in Rwanda: Opportunities and challenges”- Evidence from Umwalimu SACCO- Huye District. Nowadays, Poverty is an overarching problem in Africa which is deeply rooted in rural areas. Despite rapid urbanization, over 70 % of the poor still live in rural areas and up to 45 % of the people of the African continent live in absolute poverty (ADB, 2008). About 90 % of the people of Rwanda are poor and live in rural areas. Agriculture and agriculture-related activities being their mainstay with limited access to credits and other financial services from commercial banks or micro finance institutions mainly due to demand for collaterals or securities (NISR, 2010).
Despite massive progress in the past few decades, global poverty in all its different dimensions remains a broad and entrenched problem. For example, today, more than 700 million people subsist on extremely low incomes. Every year, five million children under five years die of diseases that often could have been prevented or treated by a handful of proven interventions. Again, a large majority of children in low- and middle-income countries attend primary school, but many of them leave school lacking proficiency in reading, writing and mathematics. How to effectively reduce global poverty remains one of humankind’s most pressing questions. It is also one of the biggest questions facing the discipline of economics since its very inception. The Royal Swedish Academy of Sciences (2019);
Africa is considered to be the poorest continent in the world followed by Asia and Latin America (PHDR, 2009). World statistics indicated that three of every four people in the developing countries live in rural areas; most of them were found in Sub-Sahara Africa whose livelihood depends on agriculture economy (Kopoka, 2006).Within Africa, the Sub-Saharan region is the poorest region where poverty is unique in the sense that majority particularly rural people are extremely poor. Rwanda is one of Sub Saharan countries where poverty is also extreme. The available statistical data from World Economic Forum Africa (2015) showed that, the country has reduced the percentage of people living below the poverty line from 57% in 2005 to 45% in 2010.
Summary of Chapters
CHAPTER ONE: Provides the introduction, problem statement, research objectives, and scope, contextualizing the study of SACCOs in Rwanda.
CHAPTER TWO: Reviews literature and theories on microfinance and cooperatives, establishing the foundation for understanding socio-economic development.
CHAPTER THREE: Offers an overview of the financial system and microfinance activities in Rwanda, highlighting the national economic context.
CHAPTER FOUR: Details the research methodology, including the design, population, sampling techniques, and data collection tools used for the study.
CHAPTER FIVE: Presents the analysis and interpretation of results regarding teachers' socio-economic status and the impact of USACCO services.
CHAPTER SIX: Summarizes major findings, draws conclusions based on the evidence, and provides recommendations for USACCO, government, and future research.
Keywords
Saving and credit cooperatives (SACCOs), Microfinance, microfinance institutions, socio-economic development, standard of living, loans, saving, Umwalimu SACCO, Rwanda, rural development, poverty alleviation, financial inclusion.
Frequently Asked Questions
What is the primary focus of this thesis?
The research focuses on the contribution of Umwalimu SACCO (USACCO) to the socio-economic development and welfare of primary and secondary school teachers in the Huye District of Rwanda.
What are the central themes of this work?
The core themes include the effectiveness of savings and credit cooperatives, the impact of microcredit on low-income groups, the role of government programs in poverty reduction, and the transformation of living standards among teachers.
What is the primary research goal?
The study aims to assess how Umwalimu SACCO services have influenced the socio-economic lives and standard of living of its members in Huye District, particularly regarding income improvement and asset acquisition.
Which research methodology was utilized?
The study employed a mixed-methods approach, combining descriptive and correlation research designs, including quantitative analysis via SPSS for survey data and qualitative content analysis for interviews.
What topics are discussed in the main body?
The main body covers the theoretical foundations of microfinance, a detailed overview of Rwanda’s financial system, the history of USACCO, and an analysis of how loan and savings products impact the teachers' standard of living.
Which keywords define this research?
The most relevant keywords are Saving and credit cooperatives (SACCOs), Microfinance, socio-economic development, standard of living, and poverty alleviation.
How did USACCO impact the members’ living conditions?
The findings indicate that members have seen improvements in their ability to pay school fees, acquire household assets, invest in farming, and obtain medical insurance, which collectively have elevated their standard of living.
What are the major challenges identified for USACCO members?
Key challenges include lack of collateral, complicated loan requirements, high interest rates compared to earnings, and insufficient training in business management for income-generating activities.
What does the study recommend for USACCO members?
The study recommends that members sensitize non-members about the benefits of saving, increase their savings to access larger loans, and diversify their income-generating activities effectively.
What is the conclusion regarding government support?
The research concludes that government subsidies and policies are crucial for reducing interest rates and making loans more accessible to low-income teachers, though the effectiveness of specific campaigns varies.
- Arbeit zitieren
- Sylvain R. Ntuite (Autor:in), 2020, The Contribution of Saving and Credit Cooperatives (SACCOS) on the Improvement of Members’ Socio Economic Development in Rwanda. Opportunities and Challenges, München, GRIN Verlag, https://www.grin.com/document/1035305
