1.2: STATEMENT OF THE PROBLEM
Rwandan economy has had several banks such as Regulatory bank,
development banks, cooperative banks and commercial banks.Despite the existence
of their formal financial credit services, poverty has remained on the increase
as well The composition of these institutions in the rural areas is majorly
micro and medium in nature.
These institutions that are the main employer and income
earner to Rwandan nationals have difficulty in accessing credit facilities from
formal financial institutions. This is due to formal financial requirements
that do not favor demands of individual, micro, small and medium firms or
enterprises. This mostly embarks on processing cost of credit collateral.
It is on this background that research aimed to investigate
how microfinance institutions which have credit requirements of the vulnerable
part of society that can benefit from credit allocation of formal financial
system in the rural areas. Thus the study focused on how micro finance
institutions are effective in bid to alleviate poverty in the rural areas.
Through this of the problem that I want to know the changes encountered by the
rural people actively involved in small business particularly in rural areas
where COPEDU Ltd agency operates
1.3: OBJECTIVES OF THE STUDY
The study aims at both general and specific objectives:
1.3.1: The general objective
The general objective of the study was to assess whether micro
finance institutions services are contributing to poverty alleviation in rural
areas.
1.3.2: The specific objectives
1. To assess the changes encountered by beneficiaries of
COPEDU Ltd and outreach of micro finance institutions in a bid to alleviate
poverty in rural.
2. To examine how the loan provided, how it is disbursed and
its repayment from the beneficiaries.
3. To determine how micro finance institutions can be financed
to alleviate poverty in rural areas of Rwanda.
4. To assess how micro finance institutions are effective in
micro credit policies
5. To determine whether beneficiaries of COPEDU Ltd are happy
for the interest rate on their savings.
1.4: RESEARCH QUESTIONS
1. What is contribution of micro finance institutions in
poverty alleviation in rural areas?
2. How do micro finance institutions extend credits to their
customers?
3. Is there any the relationship between the alleviating
poverty in rural areas and micro finance institutions?
4. Are MFIs financed greatly to alleviate poverty in rural areas
of Rwanda?
5. Are MFIs contribute anything to the customers' welfare?
1.5: RESEARCH HYPOTHESES
The underlying hypotheses for this research include:
Hypothesis 1: Micro finance institutions services reduce the
vulnerability of poor individuals and households in rural areas through
provision of micro credits to protect against risk and cope with shocks.
1.6:SIGNIFICANCE OF THE STUDY
After carrying out the study the researcher found out that
microfinanceinstitutions' role is applicable in rural areas in Rwanda.
The study was significant to the researcher, institution and
policy makers.
- To the researcher, it helped the researcher to get equipped
with knowledge and solving problems using research, by collecting all necessary
information, analyzing and interpreting that information to provide solutions
to problems. The research finding helped to researcher and other interested
parties to assess the role of microfinance institutions in alleviating poverty
in rural areas.
- To the institutions, the research was beneficial to
institutions engaging in microfinance services to sideline their activities to
suit requirement of the beneficiaries. Also it helped the finance institutions
to strengthen the use of credit thus increasing credit facilities.
- To policy makers, the research was paramount by considering
Government's anti-poverty drives. It presented the role of micro
financeinstitutions in poverty alleviation in rural areas and acted as a basis
for development. As well as formation of to enhance the activities of micro
finance institutions.
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