SACCO Refinancing Project and Job Creation in Rwanda: A Case of Business Development Fund in Gasabo District

Abstract

The study was composed of four distinct objectives: To examine the effect of loan financing on job creation of beneficiaries of BDF in Gasabo District; to examine the effect of financial literacy on job creation of beneficiaries of BDF in Gasabo District; to find out the effect assets on job creation of beneficiaries of BDF in Gasabo District and to determine the effect of Grants financing on job creation of beneficiaries of BDF in Gasabo District. The study used a survey research design. The target population is 122 SMEs that received services offered by IJABO REMERA SACCO from BDF Rwanda + 2 top managers of BDF concerning the management SACCO Refinancing project while the sample size of this study was 94 small and medium enterprises including 54 micro-businesses; 36 small business; 3 medium business and 1 large business received services offered by BDF Rwanda through IJABO SACCO Remera branch, Gasabo district. The results show that project loan financing has a significant positive influence on job creation in Rwanda as indicated by β1= 0.156, p=0.008<0.05, which means that an increase of one unit in loan financing would lead to an increase in job creation. In addition, financial literacy has a significant positive influence on the Job creation of beneficiaries of BDF in Gasabo District as indicated by β2= 0.336, p=0.000<0.05. For the third objective, assets financing has a significant positive influence on the Job creation of beneficiaries of BDF in Gasabo District as indicated by β3= 0.210, p-value=.001<0.05. For the fourth objective, the findings revealed that grants financing has a significant positive influence on the Job creation of beneficiaries of BDF in Gasabo District as indicated by β4=0.388, p-value=0.000<0.05. The study concludes that 76.3% of the variation in the job creation of beneficiaries of BDF in Gasabo District can be predicted by joint interaction of loan financing; financial literacy; assets financing and grants financing as indicated by Adjusted R squared at 95% confidence interval. Keywords: SACCO, Refinancing Project, Job Creation, Loan Financing, Financial Literacy, Asset Financing, Grants Financing