The Impact of Microcredit Services on Socio-Economic and Environmental Status of the Low-Income Households in Kicukiro District, Rwanda

Frederic Mpambara – University of Rwanda, College of Business and Economics, Prof. Gustave Tombola, M. – University of Tourism, Technology and Business Studies, Rwanda & Dr. Felician Mutasa – The Open University of Tanzania.
Email: fredhopef@gmail.com, f.mpambara@ur.ac.rw,

Received May 13, 2020; Reviewed May 20, 2020; Accepted May 21, 2020

Abstract: This study investigated “The extent to which socioeconomic and environmental status (SEES) of deep-rooted MFI clients exceeds that of non-MFI clients in Kicukiro District, Rwanda”. Mixed-methods research was adopted to achieve this objective. Quantitative data were collected using a structured questionnaire from the primary sample of 389 deep-rooted MFI clients and a control group of 111 non-MFI clients. This study used SPSS version 22 for quantitative analysis. The analysis revealed that the microcredit services influence the SEES at 0.109 Pearson correlation coefficient with p = 0.032. The independent t-test revealed that on average, the SEES of deep-rooted MFI clients was 2.2 million higher than the SEES of the non- MFI clients; t (249.47) = 5.83 with p = .000. This study used NVivo 10 to thematically analyze qualitative data from in-depth interviews and focus group discussions. The qualitative findings complement the quantitative results by triangulation. This study concludes that microcredit services have a low positive and significant impact. It recommends that MFIs should ensure that they associate microcredits with non-financial services. Additionally, policymakers and regulators should reinforce the policy to promote much more credit-lending models.