NOTE:
This paper was published in International Journal of Trend in Scientific Research and Development (IJTSRD) Volume 6 Issue 6, September-October 2022.ISSN: 2456 – 6470.
By Dr. Ernest Nyetera, PhD Scholar, Azteca University (Mexico) and supervised by Prof. Vicente Sinining, University of Technology and Arts of Byumba (Rwanda).
Abstract
Unemployment is still a challenging issue for Rwanda (17.8% of Rwandans and 21% for youth). This study analyzed Microfinance Institutions and Unemployment Alleviation in Rwanda. Using a case of Réseau Interdiocésain de Microfinance (RIM Ltd) - Nyabugogo Branch (2015- 2019). Specific objectives of the research were: to identify the clients of RIM Ltd Nyabugogo Branch and the size of loan they acquired; to find out the types of jobs created using the loan from RIM Ltd- Nyabugogo Branch; to analyze monthly income earned from jobs created through RIM Ltd- Nyabugogo Branch; to determine indicators of socio-economic development achieved through RIM Ltd- Nyabugogo Branch; and to assess challenges of employment creation through RIM Ltd- Nyabugogo Branch. The research used a mix of quantitative and qualitative approaches using open and close ended questions in a questionnaire designed in form of tables for secondary data and four levels Likert Scale for primary data where the scale of measurement was: 1= disagree; 2 = tend to disagree; 3 = tend to agree; and 4 = agree. The total population of the research is composed of 339 including 142 men; 168 women; and 29 groups borrowed from RIM Ltd- Nyabugogo Branch during the period of the study (2015- 2019). A sample of 77 respondents was selected using probability sampling; stratified sampling, and simple random sampling. Primary data was analyzed using IBM SPSS Statistics 23 (Statistical Package for Social Sciences); and the interpretation was based on mean and standard deviation.
The main findings of the research are the following: RIM Ltd Nyabugogo Branch financed 11 types of jobs for 339 clients with an amount of loan equal to 1,333,617,779 Frw. 40.3% of borrowed earn between 150,000 and 300,000 Frw; 33.8% earn above 300,000 Frw; whereas 26.0% earn between 100,000 and 150,000 Frw. Indicators of improved socio- economic development include: Improved health (mean = 3.74); improved education (mean = 3.79); improved nutrition (mean = 3.80); improved asset and equipment (mean = 3.41). The main challenges to employment creation include: High Interest rate (mean = 3.85); Business environment challenged by unstable urbanization planning causing to business relocation (mean = 4.00); High competition (mean = 4.00); High shop rentals (mean = 3.69); Poor business managerial skills (mean = 3.57); Lack or limited collaterals limiting members to apply for loans (mean of 3.50). The research recommended the reduction of interest rate to the rate of commercial banks (from24% to at least 19%); linking loan with entrepreneurship development training programs; and improving marketing strategies to attract many borrowers.
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