FINANCIAL ACCESSIBILITY AND GROWTH OF SMALL MEDIUM ENTERPRISES IN RWANDA: A SURVEY OF SELECTED SMES IN NYAGATARE DISTRICT
RWIHIMBA RUHUMURIZA JEAN CLAUDE
The research project financial accessibility and growth of small and medium enterprises in Rwanda, a case of small and medium enterprises in Nyagatare District is conducted to achieve Masters in Business Administration in the option of Accounting and Finance. In conducting this research, researcher was inspired by different problems which continue to occur in the aspect of financial accessibility and growth of small and medium enterprises. These include lack of skills by business enterprises, poor managerial skills, lack of collateral requirement by small and medium enterprises. Financial institutions become reluctant in providing credit due to risks of SMEs and inability to pay back loan. The specific objectives undertook by researcher were to identify the collateral requirements of financial accessibility on the growth of small and medium enterprises in Nyagatare District, to determine the business support services that contribute on the growth of small and medium enterprises in Nyagatare District and to establish relationship between financial accessibility and growth of small and medium enterprises. This reseach project was more significant to the researcher, government, business owners and further researchers. Research used correlation research design and the target population was 753 from which a sample of 261 were selected. The technique was structured and unstructured and primary as well as secondary data were collected. In analyzing data, researcher used SPSS version 21. Linear regression was used to estimate the relationship using Ordinary Least Square techniques. The finding shows that Loan accessibility was very difficult for the applicants. There were several conditions that were placed on a loan applicant and high value collateral was just among the requirements. Majority of the recipients of the loans were those of less than 1 million and very few were able to more than 10 Million but with the support of business support services like financial literacy and grants/guarantees, investment advisory services, business management training and tax compliance loans and grants of up to and above 15 Million was accessible. The SMEs grew in their annual turnover, number of employees and assets after accessing finances. The extent to which financial accessibility contributes to the growth of small and medium enterprise has a coefficient of 0.350 with a square of 0.059. The relationship was positive implying improvement in financial accessibility also led to increase in the growth of SMEs sample. The relationship was significant at p = 0.005 with a mean square of regression at 0.028 implying no difference in the square. In conclusion, research findings showed that there is a positive relationship between financial accessibility and SME growth in such a way that. SME growth depend on access to loans and grants, business support services as well as the ability to provide collateral requirements therefore it is highly recommended that government of Rwanda need to empower SMEs through financial facilities and protection against market changes.
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