Micro Finance Institutional Services and Poverty Reduction in Rural Areas of Rwanda: A Case of Goshen Finance in Rwamagana District

Abstract

The study aimed to evaluate the impact of micro finance institutions on poverty reduction in rural Rwanda, using a case study of Goshen Finance in Rwamagana District. The study adopted a descriptive and analytical research design, collecting primary data from Goshen Finance staff and customers, and processing it using SPSS and Excel. The targeted population consisted of 150 respondents, including 45 employees and 105 beneficiaries. The study found compelling correlations between micro-saving and lending services and financial inclusion and well-being. A robust positive correlation was found between these services and increased access to financial services, highlighting the pivotal role of microfinance institutions in extending financial inclusion, especially for underserved populations. A strong positive correlation was found between micro-saving and lending services and improved income levels, indicating that individuals engaging with these services tend to experience higher earnings due to the empowerment provided by microfinance. Additionally, a significant positive correlation was found between micro-saving and lending services and improved access to micro-insurance and medical services, crucial for ensuring financial resilience and healthcare access for vulnerable communities. The study also highlighted the importance of micro-insurance services, showing positive correlations with increased access to financial services, significantly improved income, and enhanced access to healthcare services. A positive correlation indicated that micro-insurance can contribute to better access to education for children. In conclusion, both micro-saving and lending services and micro-insurance services have proven to be valuable tools for enhancing financial inclusion, financial stability, and access to vital services, offering significant benefits to individuals and vulnerable populations.