INVESTMENT DECISION AND FINANCIAL SUSTAINABILITY OF CREDIT UNIONS IN RWANDA: A CASE OF SELECTED UMURENGE SACCO IN GASABO DISTRICT, RWANDA

Abstract

 This research aimed to assess the impact of investment decisions on the sustainability of credit unions in Rwanda, focusing on selected U-SACCOs in Gasabo District. Specific objectives included evaluating the effects of expansion decisions, credit expansion policies, and technological investments on U-SACCOs' financial sustainability. The study aimed to enhance understanding of investment decisions in financial institutions and inform the development of relevant regulations and policies. A descriptive study design targeted 142 members of U-SACCOs' administration and employees, with a sample size of 105 determined using the Yamane formula. Data were collected through questionnaires and financial analysis, with descriptive and correlation analysis employed to interpret the results.Key findings indicated that 62.2% agreed on increased operational self-sufficiency, and 71% on the subsidy dependence index. Expansion decisions were successful according to 54.3%, while 62.8% felt positively about investment decisions. Credit expansion saw 64.6% agreement on robust risk management practices. Technological investments significantly enhanced U-SACCOs' outreach, with 53.0% agreement on improved access to underserved populations. The study found a strong association between hardware acquisition and operational self-sufficiency. Software investments showed an insignificant relationship with operational self-sufficiency but were significant for financial self-sufficiency. Recommendations include further research on management practices and the role of boards of directors.

Abstract This research aimed to assess the impact of investment decisions on the sustainability of credit unions in Rwanda, focusing on selected U-SACCOs in Gasabo District. Specific objectives included evaluating the effects of expansion decisions, credit expansion policies, and technological investments on U-SACCOs' financial sustainability. The study aimed to enhance understanding of investment decisions in financial institutions and inform the development of relevant regulations and policies. A descriptive study design targeted 142 members of U-SACCOs' administration and employees, with a sample size of 105 determined using the Yamane formula. Data were collected through questionnaires and financial analysis, with descriptive and correlation analysis employed to interpret the results.Key findings indicated that 62.2% agreed on increased operational self-sufficiency, and 71% on the subsidy dependence index. Expansion decisions were successful according to 54.3%, while 62.8% felt positively about investment decisions. Credit expansion saw 64.6% agreement on robust risk management practices. Technological investments significantly enhanced U-SACCOs' outreach, with 53.0% agreement on improved access to underserved populations. The study found a strong association between hardware acquisition and operational self-sufficiency. Software investments showed an insignificant relationship with operational self-sufficiency but were significant for financial self-sufficiency. Recommendations include further research on management practices and the role of boards of directors.