The Determinants of Financial Performance of SACCOs in RWANDA: The Case of Gakenke District

SIBOMANA Silas, Elijah Maringa


This study examined different determinants of financial performance of SACCOs in Gakenke District in Rwanda. The study had an objective of to make an evaluation on whether determinants affect financial performance of SACCOs in Gakenke District. The hypothesis to be tested was that how different determinants affect financial performance of SACCOs. A sample of  63 employees  out of 76 managers, accountants, loan officers and chairmen of BoD  in SACCOs located in Gakenke District was considered .Simple random selection was considered based on purposive sampling technique. The study was both qualitative and quantitative in nature. Interviews, questionnaires and observations have been used to collect the required data. The collected data was presented using tables and pie charts. The   findings were based on objectives of the study .The findings indicated that the majority of respondents agreed that different determinants affect financial performance of SACCOs.It is further revealed that many of SACCOs in Gakenke district do not use advertisement for product differentiation .Also the scope  and coverage of SACCOs was limited to the employees in administration level only.The main conclusion was that there was   overreliance on debts (deposits) financing when extra funds is needed   by majority of SACCOs and SACCOs do not use their reserves to settle debts at maturity.The main recommendations of the study  includes that  the National Bank of Rwanda must avail enough fund for loan restructuring in order to reduce NPLs  and increase the liquidity for SACCOs in order to increase the level of performance of SACCOs. Gakenke district should help the SACCOs in recovering debts and assist SACCOs to persuade borrowers  to pay their debts and also depositors to increase their savings for better performance of SACCOs. The management of SACCOS must ensure that there is an adequate and strong credit committee and strong system of recovering of loans in order to increase their performance.

Keywords: Financial Performance, Saving and credit co-operative, Return on Equity, Return on Investment. Return on Asset.

DOI: 10.7176/RJFA/12-18-10

Publication date:September 30th 2021


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