Abstract: The deposit of U-Saccos have big contribution to its financing sources, however SACCOs are still having the problem of using manual procedures on collecting deposit from its customers, therefore this can affect negatively their performance. The general objective of this study is to examine the effect of financing alternatives on the performance of umurenge SACCOs in Rwanda. Descriptive research design was used in this study. The target population is 174 comprising of Board of directors members, Credit committee, Managers, Credit officers, Accountants and Cashiers of the 12 U-SACCOS operating in Nyabihu District. This study adopted stratification and simple random sampling. Simple random sample is considered a special case in which each population element has a known and equal chance of selection. The sample size of this study is equivalent to 100 respondents. The coefficients of model fitness on how factors influencing the performance of SACCO in Rwanda explained by Debt financing, equity financing and deposit financing. The effect of financing alternatives has an overall correlation with Umurenge SACCO performance. 0.762 is significant at 5%. These indicate good fit of the regression equation used. The overall significance of the regression estimation model. It indicates that the model is significant in explaining the relationship between effect of financing alternatives and performance at 5% level of significance. Analysis of Variance shows that f-calculated is greater that f – critical that is 5.221>0.00. This implies that the regression equation was well specified and therefore the co-efficient of the regression shows that there is a strong relationship between two variables. The analysis of variance of the predictors of the model is significance at 0.000. Results indicate that deposit financing is the most significant in explaining the performance with a significance at 0.000 which is less that a p-value of 0.05 and beta value is 0.824. Researcher found that deposit financing plays a big role to the performance of Nyabihu Umurenge SACCO. The finding of this research implies that financing alternatives are important aspects for good SACCOS’ performance. Further, they bring the implication that usage of debt financing is not a guaranteed to the performance of SACCO; and Sacco’s performance depends on deposit financing and equity financing. Savings and credit cooperatives should change the way of receiving and withdraw money using handbook. It should use the modern technology (ATM and POS machine) in order to boost their performance and facilitating their cooperative members to withdraw money at any time.
Keywords: Co-operative, SACCO, Long term debt and Short term Debt.
Title: EFFECT OF FINANCING ALTERNATIVES ON THE PERFORMANCE OF SAVINGS AND CREDIT COOPERTIVES (SACCOS) IN RWANDA (A CASE STUDY: UMURENGE -SACCOS OPERATING IN NYABIHU DISTRICT)
Author: CHRISTOPHE MUNYARUGERO, PATRICK MULYUNGI, PROF. MIKE IRAVO
International Journal of Management and Commerce Innovations
ISSN 2348-7585 (Online)
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