Influence of Umurenge Saccos Services on the Growth of Family Business in Rwanda - A Case Study of Umurenge Sacco Kimironko

Umurenge SACCOs remain competitive in the interests they charge their membership in respect of loans and other credit facilities advanced, compared to interest rates charged by banking institutions. Umurenge SACCOs services in the small business sector have long attracted the attention of researchers. Family business failure, among other reasons, can also be attributed to, apart from lack of succession planning, failure in carrying out financial management practices in running their businesses. The general objective of this research was to determine the influence of Umurenge Saccos services on the growth of family businesses in Rwanda. This study adopted a descriptive research design. The target population of this study consisted of all the 752 family businesses in Rwanda registered at Kimironko Umurenge Saccos. A sample size of 262 respondents was determined from a total population of 150 individuals using the formula by Yamane. Financial literacy (r=0.896, p=.000), financing (r=0.693, p=.002), cash management (r=0.761, p=.000) and allocation of financial resources (r=0.532, p=.002). This depicts that Umurenge Sacco services positively influence growth of family business. From the model summary the R2 was 0.764 indicating that a combination of financial literacy, financing, cash management and allocation of financial resources explained 76.4 % of the variation in the growth of family business in Rwanda. The conclusions were based on the objectives of the study that is the influence of Umurenge Saccos services on the growth of family businesses in Rwanda. It can be concluded that financial literacy measures (financial-economic knowledge and access to financial information) had significant and positive influence on the growth (in revenues and change in net-worth) of family businesses in Rwanda. Therefore, it can be recommended that managers should be able to enhance their financial management practices through acquisition of financial information that is relevant for them to make informed financial decisions relating to their businesses. This study therefore, recommends business (family) managers to be able to understand financial market operations and adhere to the requirements placed by financial institutions when requesting for credit and be able to do proper financial planning and budgeting for their businesses.