Authors : Gwiza Providence Favor; Dr. Tarus Thomas

Volume/Issue : Volume 11 - 2026, Issue 9 - September

Google Scholar : https://tinyurl.com/mw32z8ja

DOI : https://doi.org/10.38124/ijisrt/26sep1033

Note : A published paper may take 4-5 working days from the publication date to appear in PlumX Metrics, Semantic Scholar, and ResearchGate.

Abstract : This study examined the effect of loan management techniques on the financial performance of Umurenge SACCOs in Kamonyi District, Rwanda. Specifically, the study examined the effect of loan monitoring, loan appraisal, interest rates, and loan default management on the financial performance of Umurenge SACCOs. The study was guided by Modern Portfolio Theory, Liquidity Preference Theory, and Credit Risk Theory. A descriptive and explanatory research design was adopted. The target population comprised 180 staff from the 15 Umurenge SACCOs operating in Kamonyi District. Since the population was relatively small, a census approach was employed, and all 180 staff constituted the study respondents. Data were collected using structured questionnaires and analyzed using descriptive statistics, Pearson correlation analysis, and multiple regression analysis. Correlation analysis revealed that loan monitoring had a strong positive and significant relationship with financial performance (r = 0.759, p < 0.05), followed by loan appraisal (r = 0.630, p < 0.05), interest rates (r = 0.619, p < 0.05), and loan default management (r = 0.618, p < 0.05). Regression analysis established that loan monitoring (β = 0.641, p < 0.05) and loan default management (β = 0.377, p < 0.05) had statistically significant positive effects on the financial performance of Umurenge SACCOs, whereas loan appraisal (β = 0.152, p > 0.05) and interest rates (β = -0.193, p > 0.05) had statistically insignificant effects. The regression model explained 69.6% of the variation in the financial performance of Umurenge SACCOs (R² = 0.696). The study concluded that loan monitoring and loan default management are the key loan management techniques affecting the financial performance of Umurenge SACCOs in Kamonyi District. The study recommends that SACCO management strengthen loan monitoring systems, enhance loan recovery mechanisms, and continuously monitor borrowers to reduce loan default and improve financial performance. It also recommends that policymakers and regulatory authorities support SACCOs through policies and capacity-building programs that promote effective credit risk management and institutional sustainability.

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