Credit terms, credit accessibility and performance of agricultural cooperatives in Rwanda.

Abstract

The major aim of this study was to empirically examine the relationship between credit terms, credit accessibility and performance of agricultural cooperatives in Rwanda. Drawn from the literature, independent variables namely Credit terms and Credit accessibility were formulated to link each research question per relationship and the joint effect on performance. The research motivation was insufficiency of the agricultural sector in meeting the recommended output in various products lines- dairy and coffee being among the slackest and going to a trivial underperformance as low as 44% in Rwanda. The cross sectional, correlation and descriptive study designs enabled the conceptual framework in the deliberate survey and eased a structured interview schedule for data collection. Primary data was collected using self administered questionnaires issued to the respondents. Data was collected and analyzed using a sample size of 196 agricultural cooperatives randomly selected from a population of 400 agricultural cooperatives. Data analysis was done with help of Statistical Package for Social Scientist (SPSS) to test for descriptive, rotated component, correlation, and multiple regressions. The findings revealed a positive significant relationship between credit terms, credit accessibility and performance of agricultural cooperatives; the two explain about 17.6% of performance of agricultural cooperatives. Pearson correlation coefficient (r) revealed that credit accessibility proved a strong positive association and predictor effect than credit terms with regards to performance of agricultural cooperatives. This implies that to attain a higher performance level of agricultural cooperatives better mechanism for accessing credit must be put in place and credit terms/lending policies must be simplified/revised. This study recommends that in pursuit to come up with solutions on agricultural performance, other factors that have effect on performance must be emphasized.