INTERNAL ORGANIZATIONAL FACTORS AND FINANCIAL PERFORMANCE OF COOPERATIVES IN RWANDA
Although financial institutions and cooperatives have been present in Rwanda since 1970s, Saving and Credit Cooperative Societies have not significantly performed well to impact on people lives as it was initially expected due to different challenges. ZCSS was established since 1998 with the mission to uplift the wellbeing of its members the majority of whom come from security organs. To achieve this mission, ZCSS is to collect savings from and provide loans to its members at an affordable interest rate. The main purpose of this study was to establish how internal organizational factors influence financial performance of cooperative in Rwanda. The study was guided by three specific objectives, namely, to determine the effect of liquidity management factor on the financial performance of ZCSS, to assess the influence of capital strength factor on the financial performance of ZCSS and to determine the effect of credit management factor on the financial performance of ZCSS. This research was intended to be of benefit to various interested parties such as the researcher, other academicians, ZCSS, the government and regulatory agents. The study made use of correlation research design. The target population comprised of 193 employees from which 130 were selected using stratified random sampling technique as the sample elements. The research used structured questionnaire to gather primary data. The data gathered cleaned, entered into SPSS version 21 presented and analyzed using tables, charts, frequencies, means and standard deviation. At the same time, correlation, regression analysis and analysis of variance conducted to provide further data analysis. According to the findings, the internal organizational factors were found to have R2=0.572, R2=0.557 and R2= 0.383 on ROA, interest margins and ROE respectively. Therefore, the internal organizational factors were found to influence the financial performance of ZCSS. In line with these results, the researcher recommended that other microfinance institutions should mobilize savings (minimum monthly saving) from their members to strengthen their capital base for the long term sustainability and introduce a solidarity fund. Further, the management should pay keen attention to the liquidity management and credit worthiness because these were found to have significant effect on financial performance of cooperative banks.