CONTRIBUTION OF BUSINESS DEVELOPMENT FUND IN THE DEVELOPMENT OF COOPERATIVES IN RWANDA CASE STUDY OF UMWIMERERE SACCO /NYUNDO (2019-2022)

Abstract

The research purpose was ‘‘To determine the contribution of BDF in the development of Cooperatives in Rwanda and my case Study is Sacco Umwimerere /Nyundo. The specific objectives of the study are to investigate the effectiveness of working with BDF Sacco Umwimerere/Nyundo,to examine the profitability of Sacco Umwimerere/Nyundo and to Assess the relationship between contribution of Business Development Fund in the development of Sacco Umwimerere Nyundo.The study used a descriptive research design in which both qualitative and quantitative techniques were utilized. Target population of the study comprised 320 of employees and Sacco members by using bouchard formula, sample size is 76 employees and members and staffs of Sacco Umwimerere selected randomly. The researcher distributed the questionnaires by using self-administered structured questionnaires and the data collected. The data was processed by using a statistical package for social sciences (SPSS) version 22.0 used to analyze the data collected through the questionnaire. The relationship between variables was established by using correlation model. To the findings based on objectives which the respondents’ perception on BDF services indicated that the respondents strongly believe in BDF services, those services busted the development of both Sacco and its members in so significant way by increase in Sacco Members, increase in Sacco’s loan portfolio and as well as growth in Sacco’s profitability rate. The results of this study showed that Sacco Umwimerere/Nyundo has increased in a very significant way and that was because to become eligible to apply for BDF service like Start-up toolkit facility and Economic Recovery Fund phase one phase two you have to be first a member of Sacco, those new applications played a major role in increase 40,2% on Sacco members, Sacco Umwimerere loan portfolio has had a very good increase and BDF services played a vital role in that progress through funds like NEP Kora Wigire(Start-up toolkit facility), Economic Recovery Fund phase one phase two and also PASP project and that lead to the increase of loan portfolio 245% on loans portfolio, Sacco Umwimerere have had a very promising progress in its profitability from the time it started working with BDF because those funds from BDF apart from increasing loan portfolio, it also comes with other incomes like commissions on loans, interest on saving in commercial banks and interest on loan. So as a result, Sacco moved to the increase of 256% on profit after tax. During the research period 2018 before BDF contribution and 2023 after contribution of BDF were 2% and 4.9%. This means that for each 1 Rwandan francs invested in asset of Sacco Umwimerere has generated 2 Frw in 2018 before BDF contribution, and 1 Rwf invested in asset in 2023 generated 4.9 rwf, this shows that Sacco Umwimerere is profitable since there is a contribution of BDF therefore increase return on assets in order to payback the interest of its shareholders. During the research period before contribution of BDF in 2018 and after contribution of BDF in 2023. ROE ratio are the following: 7% and 19%. It means that for each one Rwandan francs invested in equity of sacco Umwimerere generated 7 rwf in 2018 and after contribution of BDF ROE Ratio is 19 % means that for 1 rwandan francs invested in equity of sacco Umwimerere generated 19 rwf in 2023. This shows that Sacco Umwimerere is profitable since there was a contribution of BDF.