Effects of Rural Small and Microenterprise Promotion Project – Phase II on Growth of SMES in Rwanda A Case of Nyange Sector -Musanze District

Abstract

Small and Micro Enterprises (SMEs) play a major role in the growth of many developing countries economic. The SME sector constitutes 98% of the businesses in Rwanda. Lack of basic training on entrepreneurship, limited or no access to finances and business information seems to be a major drawback in the growth and development of the SME sector. The purpose of this study was to determine the effect of PPPMER II project on SME growth in Rwanda. The study employed descriptive research design. The target population for the study was 184 Nyange sector based entrepreneurs who had benefited from PPPMER II project. Simple random sampling technique was used to select the sample of 124 respondents for this study. The study relied on primary data that was collected by administering questionnaires to the sampled entrepreneurs. Cronbach's coefficient was used to test the reliability of the research instrument. This gave an alpha coefficient of 0.7which indicated that the instrument was reliable. Draft questionnaire was given to the supervisors for review in order to guarantee validity of the instrument. The collected data was analyzed using SPSS. Both descriptive statistics and inferential techniques specifically Pearson correlation and regression analysis were conducted. Results were presented inform of tables and charts and graphs. The study concluded that training, financial access, and access to market information significantly and positively correlated to SMEs growth (.239^**, p<0.01) (.278^**p<0.01), (.299^**, p<0.01). Regression analysis showed that these variables could explain up to 70.8% of the variation in SMEs growth. The study recommends that training offered to the entrepreneurs should meet the needs of the SMEs growth and should be tailor-made. Also interest rate and collateral requirements by the banks should be made friendly to the SMEs operators to encourage them to borrow loans to advance their businesses. Since this research was confined to Nyange Sector, a study focusing on factors affecting SMEs growth in all the districts in Rwanda was recommended as area for further study