Service Quality and Capital Formation From Selected Village Saving and Loan Associations in Rwanda

The present study used the SERVQUAL model to assess the quality of services delivered to village savings and loans associations’ (VSLAs) members. The service given to members enables them to form capital that is used as social and economic investment. The study entitled service quality and capital formation from selected village saving and loan associations in Rwanda has been undertaken with specific objectives as to study the quality of services given to members along with their VSLAs membership, to ascertain the appreciation level of village saving and loan associations services by members, to assess the extent to which the village saving and loan associations contributed to capital formation within members, to determine the relationship between village saving and loan associations and capital formation. The study employed a cross-sectional design with a mixed-methods (qualitative and quantitative) approach. Primary data were collected from 373 participants representing 5429 VSLAs’ members. Data were analysed using descriptive statistics and correlational analysis using IBM SPSS version 20. The findings from this study revealed that 90.1% used the funds in a way that the net gain in the future is guaranteed. To assess the service quality, different dimensions have been used, and those include tangibility, reliability, responsiveness, assurance and empathy. Based on shared information by VSLAs members, the general service quality appreciation level is at a very satisfactory level of 93.0%. The correlation coefficient of 0.353 indicates the positive correlation between the VSLAs services and capital formation. The significant value of 0.000 is less than the Spearman correlation coefficient (0.353), which shows that the correlation between the two variables is statistically significant. According to the information about the t value of VSLAs services and the t value of capital formation, the alternative hypothesis stating that there is a highly significant relationship between VSLAs services and capital formation is accepted. JEL: G21; C83; L84; O55; O16; R20 Article visualizations: