1.2. Background of the
study
Since 1950, development theory has been evolving both in terms
of how rural development is conceived and how it can be best achieved. By the
early 1970 , a number of major actors in international development had begun to
agree that rural development could not no longer be defined strictly in terms
of economic productivity and efficiency, that to be effective and sustainable
;the majority of rural people had to participate in the process of the
development on going change (Robert B. Charlick 1984:1).
Today, most development economists do assert that if
development is to be realized and become self sustaining; it will have to start
in rural areas (Todaro 2003:418).The core problems of wide spread poverty,
growing inequality, rapid population growth and raising unemployment ;all find
their origins in stagnation and often retrogression of economic life in rural
areas (Todaro:2003,419).
It is therefore argued that the rural areas need to be the
leading element in (over) all strategies at least for the vast majority of
contemporary third world countries.
Rural development has therefore become a topic that attracted
many researchers and international entrepreneurs that are working and designing
policies to increase living standards of rural people through: education,
health services, transport facilities, provision of clean water, creation of
research centers and provision of income generating projects. Lack of these
indicators for development causes underdevelopment, poverty is the ultimate
outcome.
Small and medium enterprises are of great importance of
economic development through mobilizing and providing economic activities such
as agriculture, commerce and trade.
The Rwandan economy is based largely on rain-fed agricultural
production of small, semi-subsistence and increasingly fragmented farms.
The country's population is over increasing. However the
increase in population steadily weakens the poor households which depend solely
on agriculture for their live-hoods as more Rwandan are cultivators (Rwandan
Economy; lecturer notes, 2008: 4). Thus, there is a need for them to ameliorate
their standards of living through policies mentioned above by different
institutions such as small and medium enterprises.
Among these SMEs, we note that «URWIBUTSO
Enterprise» started 1983 by a young and dynamic SINA Gerard with one
employee as compared to 421 employees today; something difficult to imagine
based on the fact that he only used local human capacity and resources to
develop his business which now benefits over 3, 000 families. URWIBUTSO
means«something to remember «or souvenir.
A lot of good crops are grown in the area such as: cabbages,
pineapples, sweet potatoes, etc but among the leading crops include:
Passion fruit, Banana and pineapple plantations, Red and
yellow pepper, Apple, grapes and strawberry, Cereal crops such as wheat, maize,
sorghum for the bakery and kimaranzara restaurant.
Therefore, small and medium enterprises especially those
located in rural areas contribute more on rural development.
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