Regulatory Framework and Performance of Saving and Credit Co-Operatives in Rwanda:A Survey of Selected Saving and Credit Co-Operatives in Gasabo District

Abstract

A regulatory framework is regulation, law, rule or other orders prescribed by authority, especially to regulate the conduct of SACCO in Rwanda. Hence, the study sought to examine the impact of the regulatory framework on the performance of SACCOs in Rwanda with specific reference to the Survey of selected SACCOs in the Gasabo District. The research used a descriptive research design. The study targeted 110 drawn from two categories SACCO staff /employees and SACCO members. The study used both primary data and secondary data. The primary data was collected using structured questionnaires both open and closed. The data was analyzed using a qualitative and quantitative method using MS excel SPSS. Research findings showed there is a very high correlation (r=0.943) between internal control and performance. In addition, the study findings indicated a very high correlation (r=0.823) between saving mobilization and the performance of Sacco. It was revealed there is a very high correlation (r=0.749) between credit risk management and the performance of Sacco. The study reported the correlations between liquidity requirements and performance of SACCO is very high (r=0.923). Moreover, the results established that the regulatory framework is satisfactory in determining the performance. The adjusted R square was found to be 0.887. This implied that the regulatory framework could explain 88.7% of the variations in the performance. All four variables of the regulatory framework: Internal control, saving mobilization, credit risk management and liquidity requirement, were positively correlated to the performance. Furthermore, regression indicates that any change (increase) would have a significant change in the performance of Selected SACCO in the GASABO District. The recommendation is that the RCA and other policymakers of saving and credit cooperatives in Rwanda should clear that internal control, saving mobilization, credit risk management and liquidity requirement, and performance of selected Saccos in Gasabo District, Rwanda. There should be structuralization of permanent internal audit control and verification for all income and expenses of SACCOs and should set the boundaries for some members who ask for loans to limit payment loans. Keywords: Internal control, Saving mobilization, Credit risk management, Liquidity requirement, Performance