Effect of Risk Management on Financial Stability of Micro Finance Institutions in Rwanda
European Business & Management
Volume 4, Issue 3, May 2018, Pages: 75-79
Received: Apr. 1, 2018; Accepted: May 31, 2018; Published: Sep. 5, 2018
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Authors
Wilson Bashaija, School of Entrepreneurship, Jomo Kenyatta University of Agriculture Technology, Nairobi, Kenya
Jacob Niyoyita Mahina, Department of Business Studies, University of Tourism, Technology and Tourism, Kigali, Rwanda
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Abstract
The study sought to establish the effect of risk management on financial stability of micro finance institutions in Rwanda. In Rwandan perspective, financial system is still relatively shallow and thus potential impact on financial stability. The researcher used Theory of Corporate Risk Management. Research Design, Population, Sampling Frame and Size, Data Collection Instruments, Data Collection Procedure, Pilot Test, Reliability of the Instrument, Validity, and Data Processing and analysis were used during the study. Data analysis was descriptive statistics and inferential statistics using Statistical Packages for Social Sciences (SPSS) version 21. SPSS produced frequencies, descriptive and inferential statistics which was used to derive conclusions and generalizations regarding the population. The analysis of variance (ANOVA) was checked to reveal the overall model of significance. A critical p value of 0.05 was used to determine whether the overall model is significant or not. The results were indicated that as per the variable. Risk management has a positive and significant effect on compliance and financial stability on Financial Stability of MFI. The study recommended that there must be a policy for the MFI to try to stick to one bank in order to create a good relationship with the bank. The study also recommends that the government of Rwandans should timely review the timelines set for completing their full risk-based assessment of the effectiveness of their financial reporting controls and for addressing identified gaps and weaknesses, to ensure that they are timely reported.
Keywords
Risk Management, Financial Stability, Micro Finance Institutions
To cite this article
Wilson Bashaija, Jacob Niyoyita Mahina, Effect of Risk Management on Financial Stability of Micro Finance Institutions in Rwanda, European Business & Management. Vol. 4, No. 3, 2018, pp. 75-79. doi: 10.11648/j.ebm.20180403.12
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Copyright © 2018 Authors retain the copyright of this article.
This article is an open access article distributed under the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/) which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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