THE IMPORTANCE OF AVAILABILITY OF MICROFINANCE INSTITUTIONS IN CREATING SUSTAINABLE ENTREPRENEURSHIP ECOSYSTEM IN RWANDA
Abstract
Purpose of the study: The purpose of the study was to examine the importance of the availability of microfinance in creating a sustainable entrepreneurship ecosystem in Rwanda. The most crucial step to reduce poverty is creating employment and providing income-generating opportunities for the poor. The prime objective of people to participate in the microfinance program is to get access to credit funds to start micro-business and create employment for themselves.
Research Methodology: The study was literature review-based. Previous studies were used for making the inferences.
Research findings: It was found that the availability of microfinance is fundamental for creating a sustainable entrepreneurship ecosystem in Rwanda. Kigali's entrepreneurial ecological community currently has substantial potential to turn into one of the leading entrepreneurial centres in Africa. Rwanda has one of the fastest expanding and many entrepreneur-friendly economic conditions in Africa. Kigali currently has an active and also growing entrepreneurial ecological community with over 20 ESOs. The growth of microfinance institutions helps low-income households to stabilize their income flows and save for future needs. In good times, microfinance allows families and small businesses to prosper, and at times of crisis, it can help them cope and rebuild.
Conclusions: It is concluded that microfinance institutions are fundaments to help in creating a sustainable entrepreneurship ecosystem in Rwanda. The microfinance institutions are helping to support the creation and growth of new ventures. The microfinance intuitions support the new ventures with starting capital and advice on the best venture, thus stimulating the entrepreneurship ecosystem growth and sustainability. Moreover, it is concluded that growth of microfinance institutions helps low-income households to stabilize their income flows and save for future needs. In good times, microfinance allows families and small businesses to prosper, and at times of crisis, it can help them cope and rebuild.
Recommendations: It is recommended that the government need to create a conducive environment. Microfinance institutions can only survive in a friendly working environment. Moreover, it is also recommended that the government and other non-governmental institutions encourage the people, especially low-income earners, to take loans from the microfinance institutions to start the business. The interest rate from microfinance institutions is always low compared to other financial lenders. The research furthermore suggested that surveillance and assessing the implementation of entrepreneurship policies before providing those funds need to be reviewed. Before starting an entrepreneurial activity, they must examine existing records and data collected about the market, its constraints and possibilities for spending where there is a particular niche and use less funding and have high returns.
Keywords: Microfinance institutions, sustainable entrepreneurship ecosystem, Rwanda
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