Microfinance and business growth of women small and medium enterprises's in Rwanda

Type Journal Article
Title Microfinance and business growth of women small and medium enterprises's in Rwanda
Publication (Day/Month/Year) 2015
URL http://www.eajournals.org/wp-content/uploads/Microfinance-and-Business-Growth-of-Women-Small-And-Med​ium-Enterprisess-In-Rwanda.pdf
The purpose of this study was to examine the extent to which Micro Finance
contributes to the growth of Women Small and Medium Enterprises (SME) in Rwanda because
despite improved access to credit by SMEs overtime, SMEs have continued to suffer financial
challenges. The Women SMEs have registered a low return on capital employed, low net profit
margin and kept a small capital size and some of them fail to run their daily operations because
they do not have the capacity to maintain adequate liquidity levels. As such, the relationship
between the MFIs and Women SME keeps on deteriorating due to failure to fulfil their loan
obligations. The researcher used descriptive method of study based on qualitative and quantitative
approach in order to get better analysis of the study. The population size was 884 out of which
275 were taken as sample size. Both primary and secondary data collection tools with their
relevant tools like questionnaire and documentary analysis in order to come up with required data.
In the findings it was established that Microfinance institutions provide many different services
like loan, advice on investment, savings and training on investment to women SMEs in Kicukiro
district. MFI also supports different sectors ranging from Agricultural sector, trading sector,
crafts, Agro processing, services like catering, construction, production/ manufacturing,
education, Textile and Fabric and many others. It indicates that business performance before
micro finance loan was fair which means that the entrepreneurs needed microfinance loan in order
to promote business performance. In spite of the challenges of small and medium enterprises face
like high interest rate, lack of collateral, the research findings indicate that microfinance improved
business performance inform of capital base increase, profitability increase, growth in size and
expansion in size. This justifies the role of microfinance in socio economic development especially
in the developing world hence women entrepreneurs should embrace microfinance in order to
promote their business effectively. The Pearson correlation coefficient reveals that there is a
positive high relationship between Micro finance institutions and growth of Women Small and
Medium Enterprise (SMEs). This is shown by the value equal to 0.811** tested at 0.01 level of
significance. Consequently, it is concluded that Micro finance institutions have a positive impact
on growth of selected Women Small and Medium Enterprises in Rwanda.

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