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September 10, 2025Open Access

The Effect of Credit Risk Management on Profitability of Saccos in Rwanda

Key Points

Loan recovery management positively impacts SACCO profitability in Kayonza District, offering a potential avenue for improvement.
Client appraisal was found to have no significant relationship with the profitability of SACCOs, indicating a need for stronger evaluation methods.
Data analysis utilized multiple linear regressions to identify critical factors affecting SACCO profitability in the study population.
Implications suggest that effective credit risk management strategies may enhance financial health for SACCOs, supporting local economic stability.

Abstract

Loan management as methods and strategies adopted by a firm to ensure that they maintain an optimal level of credit and its effective management and with references to financial statements of SACCO in Kayonza District, there was a decline in profitability. The effect of credit risk management on profitability of saccos in Rwanda.The population of the study comprises of 36 employees SACCOs in Kayonza District. The sample size was 36 employees obtained using purposive sampling technique. Questionnaire and documentary review were used as sampling technique of data collection. Descriptive and inferential statistics such as multiple linear regressions were used to analyse data. The findings revealed that revealed the client appraisal is not to be significantly related to profitability of SACCOs. The findings revealed that loan risk management was significantly and positively related to profitability of SACCOs in Kayonza District. The findings revealed that loan recovery management was significantly and positively relate to profitability of SACCOs.

The Effect of Credit Risk Management on Profitability of Saccos in Rwanda

Key Points

Abstract

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