THE FINANCIAL MERGING SYSTEM AND ITS IMPACT ON THE INSTITUTIONS’ PERFORMANCE IN RWANDA (A case study of MTG Ishema SACCO)
This study aimed at examining the impact of financial merging system on the performance of microfinance institutions in Rwanda. It was carried out in M Mulindi Tea Growers(MTG) Ishema SACCO as the formed institution after merging the MTG SACCO and COOPEC Ishema. The main problem that motivated the researchers to conduct this study was the slow performance of several institutions in Rwanda due to their poor merging system. This research was guided by the following specific objectives: to determine the effectiveness of the financial merging practices in MTG Ishema SACCO; to find out the challenges encountered by MTG Ishema SACCO in its financial merging system, and to analyze the relationship between the financial merging system and the performance of MTG Ishema SACCO.
This research applied descriptive research design with both quantitative and qualitative methods to analyze data. The target population under this study was 14016 individuals composed by employees, directors, and clients of MTG Ishema SACCO. The sample size was 99 respondents selected using the purposive sampling technique. The primary data were collected through the use of questionnaire, interview and observation techniques; while the secondary data were collected through documentation technique. SPSS 16 computer program was used to quantify data from questionnaires.
Therefore, data analysis and presentation show that the impact of financial merging system on the performance of financial institutions especially MTG Ishema SACCO was the increased profitability, improved the customer satisfaction, improved the brand name, increased the liquidity, improved the financial efficiency, increased the solvency, and the increased the repayment capacity. The study concluded that the financial merging system has a great contribution in improving the performance of several institutions in Rwanda. Finally, the study gave the recommendations to different institutions in improving the effectiveness of financial merging system towards the performance.
Keywords: Financial Merging; Financial merging system; Performance; Microfinance institutions.