Impact of credit on welfare improvement in Rwanda: case study: Koruteganya umurenge SACCO of Nyamabuye

Abstract

In recent years, governmental and nongovernmental organizations in many low-income countries have introduced financial inclusion programs, whereby the poor are the most targeted. However, most of the targeted people, including the poor have limited access to labour income, and consequently are credit constrained. In addition, constraints in age, bank regulations, lack of knowledge of the members, and infrastructures are hindering the efforts to financial inclusion. This study set out to determine the effect of credit on welfare improvement of KUSACCO members. It aimed at identifying the contribution of loan granted by KUSACCO to the improvement of wealth, education, and health of the KUSACCO members. Primary data on the selected respondents were collected using a structured interview schedule and secondary data were obtained from the Umurenge SACCO Headquarters. The effect of credit is obtained by comparing the level of wealth, education, and health during the period before and after credit is granted to the members. In addition, to ensure that the effect is significant, the ANOVA test was performed, and results confirm the positive effect of credit on income of the members. Future studies on welfare improvement effect of credit should include all other determinants of w, and also at the whole country level.