Microfinance and Business Growth of Women Small and Medium Enterprises’s In Rwanda. (A Case of Selected Women Small and Medium Enterprises in Kicukiro District) (Published)
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.
Keywords: Business Growth, Micro-Finance, Small and Medium Enterprises