Effect of Financial Inclusion on Performance of Agrico-Operatives in Rwamagana District. A Case of CORICYA
DOI:
https://doi.org/10.53819/81018102t2226Abstract
The general objective of this study was to assess the effect of financial inclusion on performance of agrico-operatives in Rwamagana District. The study had the following specific objectives: to find out the effect of savings behavior on performance of agrico-operatives in Rwamagana District, evaluate the effect of access to credit practices on performance of agrico-operatives in Rwamagana District and assess the effect of financial literacy practices on performance of agrico-operatives in Rwamagana District. Agricultural cooperatives in Rwanda encounter challenges pertaining to limited financial access in their day-to-day operations. These challenges arise from the banking system's imposition of high collateral requirements and incompatible lending conditions. For instance, the periodicity of loan repayment is not aligned with the agricultural cycle, leading to poor results. Additionally, the cooperatives face issues related to low productivity and a high reliance on climate conditions, adding to their financial constraint. In this case the population under this study is 600 members of CORICYA in Rwamagana. The Solvin equation used to determine the appropriate sample size. This calculation representative sample of 240 for the study. The use of simple random sampling as a method employed to select a representative sample from the entire population. The following instruments were used to gather data for the research: a questionnaire and a documentation research. The statistical analysis of the collected data conducted using Statistical Package for Social Sciences (SPSS) which is a widely used tool for statistical computation in research. The researcher employed descriptive and correlational analysis in this approach. For savings behavior was 0.520, and this implies that for each increment of one unit in savings behavior, there is an anticipated increase of 0.520 units in the performance of agriculture cooperatives. Importantly, savings behavior exhibits a positive and statistically significant impact on cooperative performance (p<0.05). Similarly, the coefficient for access to credit services is 0.183. This means that for each one-unit increase in access to credit services, there is an expected rise of 0.183 units in the performance of agriculture cooperatives. Access to credit services also demonstrates a positive and statistically significant effect on cooperative performance (p<0.05). Lastly, the coefficient for financial literacy is 0.153. This indicates that with every one-unit augmentation in financial literacy, the performance of agriculture cooperatives is projected to rise by 0.153 units. Financial literacy likewise exerts a positive and statistically significant impact on cooperative performance (p<0.05). These results underscore the collective importance of savings behavior, access to credit services, and financial literacy in exposing the variations in performance of CORICYA agricultural cooperative. It is recommended that CORICYA agricultural cooperative continue to prioritize and incentivize savings behavior among its members. Implementing strategies to encourage regular savings and offering attractive interest rates will further enhance the cooperative's financial stability and enable it to meet members' needs effectively.
Key words: Financial Inclusion, Savings Behavior, Access to Credit Practices, Financial Literacy Practices, Performance of Agricultural Cooperatives
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