IMPACT OF CREDIT OFFERED BY FINANCIAL INSTITUTIONS ON SOCIO-ECONOMIC DEVELOPMENT

Abstract

This paper set out to investigate the impact of credit offered by financial institutions on social economic development of its beneficiaries from 2016-2020. General objective was to assess the impact of credit offered on socio-economic development while specific objectives were to analyze status of loans management to provide recommendations based on the findings.The research results revealed that credit management is effective where by total loans offered has a positive growth, trend from 2016-2020 has been increased its credits where from 2016-2017 increment of credit was 22% in 2018 was 20% and 19% in 2019. This increase of loan granted by resulted from strong management of loan. At the end of 2019 shows how the credit amount progressed from 2016 to 2019 the amount has raised step by step at the beginning, offered Rfw 385,824,570 to Rwf 678,005,885 from 2016 up to 2019, the progression in four years raised roughly 2.5 times. Whereas nonperforming loans at was the ratio were good during our period of study 2016 to 2019, the normal ratio of NBR required to banks should not exceed In 2016 the ratio increase to 4.5% and 5.6% in 2017 also increased up to 4.9% in 2018 and 5.7% in 2019 which is better compare to the standard of National Bank of Rwanda does not exceed 7%.The research findings on impact of credits to the socio-economic development was analysed by using T-test analysis whereby respondents’ response were valued at likely score of the results shows that balance diet: by testing hypothesis the the p-value from tailed sample mean and two tail has been used, degree of freedom (df)=94, and p-value(P)=1.98 and 1.66 ~two tail, one tail.  The student statistical  table that significant level is above 0.05 (p≥0.05).thus implies that there is statistical difference between two sample means. Income of respondents: by testing hypothesis the the p-value from tailed sample mean and two tail has been used, degree of freedom (df)=94, and p-value(P)=1.985 for two tail. The student statistical  table that significant level is above 0.05 (p≥0.05).thus implies that there is statistical difference between two sample means. This implies that there is change of social economic status of beneficiaries.