Abstract:
Most studies have come up with unpredictable findings in ralation to research about Savings and
Credit Cooperatives which don’t fully resolve the issue of whether a SACCO’s corporate
governnance leads to improvements in SACCOs’ financial performance. Hence, this left the
researcher willing to find out whether corporate governance affects the financial performance of
SACCOs in Rwanda, with reference to Umurenge SACCO. The study was built on both general
and specific objectives. The general objective of this study was to apprehend the effect of corporate
governance in the financial performance of SACCOs in Rwanda whereas the specific objectives
were; to assess the level of corporate governance practices in Umurenge SACCO, to analyze the
financial performance of Umurenge SACCO in terms of liquidity, solvency and profitability and
to identify the relationship between corporate governance and performance of Umurenge SACCO.
In order to reach the achievement of the above objectives, a combination of questionnaires,
interviews, documentary reviews and analyzing financial and other reports were used. Distribution
of questionnaires was done to a group of 40 respondents who included the staffs of Umurenge
SACCO, Rwamagana district. Universal sampling technique was applied in the study. Findings
revealed that corporate governance practices are well supported under specific activities that are
tackled both tactically and strategically which according to the findings led to better financial
performance and this was represented by a mean of 4.9. Umurenge SACCOs ROA was seen raising
as a result of emphasising corporate governance in the SACCO. From the chi square test analysis,
the p value was found to be 0.007 which explains that there was a strong, positive monotonic
correlation between corporate governance and financial performance hence, a positive impact on
the financial performance of SACCOs in Rwanda. Concerning environmental scanning, this
SACCO’s top management should always identify strategic factors that benefit the SACCO in
towards it financial performance and this will help to combat a tendency of dependence on the top
management hence effective corporate governance. As a way of having better corporate strategies
in the institution, all staffs are recommended to always respect the top management’s
recommendations and advice to all the staff. More so, the entire staff should always have an idea
about what the top management has put in place.
