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
Views 728      Downloads 110
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
Article Tools
Follow on us
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.
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
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.
Admati, A., & Hellwig, M. (2014). The bankers' new clothes: What's wrong with banking and what to do about it? Princeton University Press.
Agumba, J. (2012). Competitive strategies in response to challenges of external environment by Water Resources Management Authority in Kenya. Unpublished MBA Thesis, University of Nairobi.
Agyekum, K. F. (2017). A trajectory of financial inclusion towards economic inclusion: Empirical.
Brody, R. G., Melendy, S. R., & Perri, F. S. (2012). Commentary from the American Accounting Association's 2011 annual meeting panel on emerging issues in fraud research. Accounting Horizons, 26(3), 513-531.
Cole, R. V., & Tambunlertchai, S. (2017). The Future of Asia-Pacific Economies: Pacific Islands at the crossroads. Canberra, ACT: National Centre for Development Studies, Research School of Pacific Studies, the Australian National University.
Dionne, G. (2013). Risk management: History, definition, and critique. Risk Management and Insurance Review, 16(2), 147-166.
Duffie, D., & Singleton, K. J. (2012). Credit risk: pricing, measurement, and management. Princeton University Press.
Galati, G., & Moessner, R. (2013). Macroprudential policy–a literature review. Journal of Economic Surveys, 27(5), 846-878.
Giles, S. (2012). Managing fraud risk: a practical guide for directors and managers. John Wiley & Sons.
Guiso, L. (2010). A Trist-Driven Financial Crisis. Implications for the Future of Financial Markets.
Gulshan, S. S. (2011). Management Principles and Practices by Lallan Prasad and SS Gulshan. Excel Books India.
Hamdan, M., & Low, P. K. (2014). Sovereign Wealth Funds and Wealth Management in Brunei Darussalam. Business Journal for Entrepreneurs, 2014(1).
Kahuthu, K. M. (2016). The effect of trade finance on the performance of commercial banks in Kenya (doctoral dissertation, school of business, university of Nairobi).
Knell, M., & Stix, H. (2010). Trust in Banks-Evidence from normal times and from times of crises.
Levine, R. (2005). Finance and growth: theory and evidence. Handbook of economic growth, 1, 865-934.
Mugenda, O. M., & Mugenda A. G. (2008). Research Methods; Quantitative and Qualitative Approaches. Nairobi: Act s Press. Musau, S. M. (2017). The Role of Strategic Management Practices on Competitiveness of Floriculture Industry in Kenya: A Case of Kiambu County (Doctoral dissertation, United States International University-Africa).
Patro, D. K., Qi, M., & Sun, X. (2013). A simple indicator of systemic risk. Journal of Financial Stability, 9(1), 105-116.
Rehman, A. A., Benamraoui, A., & Dad, A. M. (2017). A comparative study of Islamic and conventional banks’ risk management practices: empirical evidence from Pakistan. Journal of Banking Regulation, 1-14.
Rogers, E. M. (1995). Diffusion of Innovations: modifications of a model for telecommunications. In Die Diffusion von Innovationen in der Telekommunikation (pp. 25-38). Springer Berlin Heidelberg.
Smith, C. W., & Stulz, R. M. (1985). The determinants of firms' hedging policies. Journal of financial and quantitative analysis, 20(4), 391-405.
Smithson, B. J., Aknin, J. D., Lichac, G. J., Moncrief, R. L., & Winblad, W. O. (1993). U.S. Patent No. 5,240,417. Washington, DC: U.S. Patent and Trademark Office.
Stulz, R., & Johnson, H. (1985). An analysis of secured debt. Journal of financial Economics, 14(4), 501-521.
Tambunlertchai, K. (2017). Financial Inclusion in Myanmar: What Factors Determine Access to Saving and Credit Products For Informal Sector Workers?. Southeast Asian Journal of Economics, 5(1), 77-107.
Tornatzky, L. G., Fleischer, M., & Chakrabarti, A. K. (1990). Processes of technological ` innovation. Lexington Books.
Tufano, P. (1996). Who manages risk? An empirical examination of risk management practices in the gold mining industry. The Journal of Finance, 51(4), 1097-1137.0.
Waemustafa, W., & Sukri, S. (2016). Systematic and unsystematic risk determinants of liquidity risk between Islamic and conventional banks.
Zikmund, W. G., Babin, B. J., Carr, J. C., & Griffin, M. (2013). Business research methods. Cengage Learning.
Science Publishing Group
1 Rockefeller Plaza,
10th and 11th Floors,
New York, NY 10020
Tel: (001)347-983-5186