i

COLLEGE OF ARTS AND SOCIAL SCIENCES

SCHOOL OF GOVERNANCE

MASTERS IN LOCAL GOVERNANCE STUDIES

Factors Affecting the Performance of Cooperatives in

Gasabo District-Remera Sector (2012-2018)

Dissertation submitted in partial fulfilment of the

requirements for the Master’s degreeof Social Science

in Local Governance Studies

Done by Francis NKURUNZIZA

SUPERVISOR:Dr UWIZEYE Dieudonné

Kigali, October 2019

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Declaration

I,Francis NKURUNZIZA,do hereby declare that this research paper submitted to the

University of Rwanda (UR), Arts and Social Sciences College, Governance School, fully

belongs to meexcept where specifically recognizedand has never been given to any other

higher learning institution for degree award.

Francis NKURUNZIZA

Reg. Number:217291988

Signature: ……………………………………….

Date: ……………………………………………..
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Dedication

To my beloved wife and children, my brothers and sisters as well as my late parents, this

thesis is dedicated.
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Acknowledgments

The completion of this work required the assistance from different people to whom I owe

recognition.

Firstly, I thank all powerful God, because of his power, love as well as supremacy. It is only

through the almighty mercy that one could reach at this educational level.

My special recognition goes to my supervisor Dr.UWIZEYE Dieudonnéwhose professional

guidance, encouragement and correction of this work were indispensable for the successful

completion. Without him this work could not have been achieved.

I extend my thanks to all my Lecturers, classmates for the academic guidance and support

accorded to me during my period of study.

I wish to thank Gasabo District administration and my informants, for their invaluable

contribution.

Sincere thanks go to all friends who contributed to the achievement of the study.

God bless all of you abundantly!

Francis NKURUNZIZA
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TABLE OF CONTENTS

Dedication .............................................................................................................................................. iii

Acknowledgments.................................................................................................................................. iv

TABLE OF CONTENTS ........................................................................................................................ v

List of Figures ....................................................................................................................................... viii

Abbreviations and Acronyms .................................................................................................................. x

CHAPTER I: GENERAL INTRODUCTION ........................................................................................ 1

1.1 Study Background ............................................................................................................................. 1

1.2. Statement of the Problem ................................................................................................................. 4

1.3. Study Objectives .............................................................................................................................. 4

1.4. Research questions ........................................................................................................................... 5

1.5. Study Significance ........................................................................................................................... 5

1.6. Study Scope ..................................................................................................................................... 6

1.7. Limitations ....................................................................................................................................... 8

1.8. The study organization ..................................................................................................................... 8

CHAPTER II: LITERATURE REVIEW ........................................................................................................... 9

2.1. Definition of key concepts ............................................................................................................... 9

2.1.1 Performance ................................................................................................................................... 9

2.1.2. Cooperative ................................................................................................................................... 9

2.2. Literature review ............................................................................................................................ 10

2.2.1 Principles of Cooperatives ........................................................................................................... 10

2.2.2 Types of cooperatives ................................................................................................................. 12

2.2.3 Factors influencing the cooperatives to succeed or fail ............................................................... 12

2.2.3.1. Internal Factors ........................................................................................................................ 12

2.2.3.2 Factors that are external ............................................................................................................ 14

2.2.4 Reasons and benefits for joining cooperatives: ............................................................................ 15

CHAPTER III: RESEARCH METHODOLOGY ................................................................................ 18

3.2 Study design .................................................................................................................................... 18

3.3 Population study.............................................................................................................................. 19

3.4 Sampling procedures ....................................................................................................................... 19

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3.4. Sample size and selection process ................................................................................................. 20

3.5. Data collection instruments............................................................................................................ 21

3.5.1. Primary data ................................................................................................................................ 22

3.5.1.1. Questionnaire ........................................................................................................................... 22

3.5.1.2 Semi-structured face-to-face interviews ................................................................................... 23

3.5.2 Secondary data ............................................................................................................................. 24

3.6. Variables and variable measurements........................................................................................... 24

3.7. Data analysis .................................................................................................................................. 25

3.7.1. Editing ......................................................................................................................................... 25

3.7.2. Coding ......................................................................................................................................... 26

3.7.3 Statistical analysis ........................................................................................................................ 26

3.8 Ethical considerations ..................................................................................................................... 26

CHAPTER IV: PRESENTATION AND INTERPRETATION OF DATA ........................................................... 27

4.1. Introduction .................................................................................................................................... 27

4.2. Characteristics of respondents ....................................................................................................... 27

4.3Factors affecting the performance of cooperatives in Gasabo district ........................................... 31

4.3.1 Cooperative governance-related factors....................................................................................... 31

4.3.2 Cooperative managerial - related factors ..................................................................................... 43

4.3.3Government involvement and its effects on cooperative performance ......................................... 52

4.4Discussion of the findings ................................................................................................................ 58

CHAPTER V: GENERAL CONCLUSION AND RECOMMENDATIONS ........................................................ 64

5.1. Introduction .................................................................................................................................... 64

5.2 Conclusion on the findings ............................................................................................................. 66

5.3 Recommendations ........................................................................................................................... 70

5.4 Areas of further research ................................................................................................................. 72

References ............................................................................................................................................ 73

APPENDIX 1: THE NUMBER OF COOPERATIVES IN GASABO DISTRICT PER SCOPE OF WORK .............. 80

APPENDIX 2: QUESTIONNAIRE FOR RESPONDENTS (COOPERATIVEBOARD MEMBERS AND

COOPERATIVE ORDINARY MEMBERS). ................................................................................................. 82

APPENDIX 3: INTERVIEW GUIDE ........................................................................................................... 90

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List of tables

Table 1: Characteristics of the informants .................................................................................... 28

Table 2: Extent to which cooperative guiding principles are made and expected by members ... 35

Table 3: Level of relationship between cooperative members and cooperative leaders............... 37

Table 4: Extent at which cooperative leadership works for members’ common interests ........... 42
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List of Figures

Figure 1: Years of working experience in the cooperative ........................................................... 30

Figure 2: Awareness level on the vision and mission of their cooperative .................................. 31

Figure 3: Frequency of meetings (General assembly) organized by the cooperative .................. 32

Figure 4: Members’ participation in decision-making.................................................................. 33

Figure 5: Extent to which members’ opinions are taken into account in decision-making .......... 34

Figure 6: Frequency of election of cooperative committee .......................................................... 38

Figure 7: Fairness of election of committees ................................................................................ 39

Figure 8: Training of cooperative members.................................................................................. 40

Figure 9: Who manages the cooperative....................................................................................... 44

Figure 10: Extent to which transaction costs are minimized ........................................................ 45

Figure 11: Existence of well-done business planning and financial management ....................... 46

Figure 12: Existence of effective human resource management .................................................. 47

Figure 13: Marketing capacity of cooperative ............................................................................. 48

Figure 14: Existence of performance contract system .................................................................. 49

Figure 15: Existence of financial control committee .................................................................... 50

Figure 16: Accountability in case of mismanagement .................................................................. 50

Figure 17: Extent to which government officials’ involvement affects cooperative

performance .................................................................................................................................. 52

Figure 18: Extent to which government involvement hampers the autonomy of cooperatives.... 53
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Figure 19: Government involvement in providing a political, legal ground for cooperative to
flourish .......................................................................................................................................... 54

Figure 20: Extent to which government involvement facilitates cooperatives to easily access
to resources and markets ............................................................................................................... 55

Figure 21: Respondents’ suggestions to increase cooperative performance ................................ 57

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Abbreviations and Acronyms

Art:Article

Etc:Et cetera

ICA: International Cooperative Alliance

KC:Kigali City

MINICOM: Ministry of Commerce

NCP:National Co-operative Policy

RCA: Rwanda Cooperative Agency

RTV: Rwanda Television

RFW: Rwandan Francs

RIB: Rwanda Investigation Bureau

SACCOs: Savings and Credit Cooperatives

SPSS: Statistical Package of Social Sciences

UR: University of Rwanda

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Abstract

The issue of cooperative sustainability is a global reality. In Africa, the functioning of

cooperatives has faced a number of problems: managerial incapacities, unclear incentives for
starting cooperatives, poor governance, lack of capital resources, corruption and huge lack of
management by officials, theft of cooperative resources, favoritism in recruiting and firing
employees, as well as interestconflicts. In Rwanda, cooperatives have encountered a number
of challenges,and a number of them have performed well and others have
performedpoorly,whereas others have gone bankrupt.

The current study seeks to determine limitations hindering cooperatives performance

inGasabo District. Specifically, the study aimed atdetermining the cooperative governance
factors which hinder the performance of cooperatives in Gasabo District;assessing the
cooperative managerial factors which hinder the performance of cooperatives in Gasabo
District; and determining government intervention related factors which weaken the
performance of cooperatives in Gasabo district. The research was mainly of descriptive
research design and triangulation of data collection methods was used. Ninety- one (91)
respondents, members of seven (7) cooperatives in Remera sector participated in the survey.
In addition, five (5) key informants were interviewed. The findings showed that cooperative
governance related factors which affect the performance of cooperative are: though the
mission and vision of cooperatives are well stated, it was found that 58.3% of members have
poor knowledge or do not know at all the vision and mission of their cooperatives.
Cooperative members not associated in decision making as confirmed by 73.6%. Cooperative
managerial related factors that affect the performance of cooperatives were poor financial
management confirmed by 59.3% which results to high transaction costs. Poor human
resource management as confirmed by 78%. 97.8% confirmed the lack of managerial system
of signing performance contract. In addition, majority of 85.7% agreed that excessive
government intervention in cooperative affects the autonomy of decision-making and the
cooperative performance. The recommendations formulated are that government through
RCA should strengthen monitoring of cooperatives, local government authorities should
increase field-visits to cooperative, cooperative leadership and members must actively be
engaged for the development of their cooperatives.

Keywords: Factors;Performance; Cooperative and District

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CHAPTER I: GENERAL INTRODUCTION

1.1 Study Background

Cooperative sustainability issue is a global reality. According to Ryeder(2013), cooperatives

should turn the tide and act as agents of change in the world economic development arena.

According to Chloupková(2002),challenges that face the cooperatives development are based

on: political and economic system, economic situation of the globe, state, government,

legislation, socio-economic policies, technological advancement, skills and knowledge, way

of life, demographic dynamics, cultural values, people’s movements and trade unions. To

this end, policy issues were identified as stumbling blocks to the cooperative sustainability ,

especially where members prioritize policy compliance for their organization(Kyazze, Nkote,

& Wakaisuka-Isingoma, 2017). However, cooperative organizations in Malaysia are

grappling with a number of difficulties such as generating and getting sufficient capital to

help them execute their plans but these issues should be sorted out by the government as well

as cooperatives themselves(Othman, Kari, Jani, & Hamdan, 2012).

In Africa, cooperatives performance has faced many problems. In the study conducted by

Nkhoma(2011), on factors affecting sustainability of agricultural cooperatives in Malawi,

managerial capacities, incentives for starting cooperatives, and poor governance were

observed. According to Ortmann & King(2007), the major difficulties that lead cooperatives

to perform poorly in South Africa have something to do with insufficient management

experience and knowledge, inadequate capital resources, and unfaithfulness of members

because of their ignorance. However, dishonest and illegal behavior; huge mismanagement

and robbery by the people who were supposed to be the custodian of cooperatives resources;

lack of cooperation among cooperatives; lack of transparence; to not abide by democratic

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principles; favoritism in recruiting and firing employees; interests conflicts in cooperative

leaders and managers; disputes; investments without seeking cooperative members consent;

embezzlement of funds. These issues have destroying repercussions instead of constructing

the cooperatives as profitable organizations(Gicheru, 2015).

In developing countries, sometimes cooperatives do not have their long term plans but enjoy

to depend on government assistance ,which in turn has its own consequences on cooperatives

sustainability(Khumalo,2014). The interference of the government does not allow

cooperatives to turn into profitable businesses and make cooperative members inactive(Shaw,

2006).In this regard, major stumbling blocks to the progress of cooperatives are the

ineffective participation of cooperative members; inappropriate control of government on

cooperatives; the dependence syndrome; and insufficient capital to run cooperative

activities(Wanyama, 2013).

Cooperative perspectives in Rwanda have encountered a lot of criticisms and many have

shown strengths and weaknesses in their effectiveness. It has been observed that cooperative

leaders and managers are the only one who yield the fruits of cooperatives(Mubirigi, 2016).

In the past, cooperative in Rwanda have not borne fruits because of being poorly established.

Cooperatives were used as tool to benefit others in the place of their members. The poor

performance of cooperatives has been ascribed to mismanagement and especially to the

interference of government workers in their businesses(Sentama, 2009). However, some of

the cooperatives still face the problem of poor performance(Mubirigi, 2016).

Cooperatives in Rwanda did not have a good start(RCA, 2012).The government injectedhuge

resourcesin cooperatives, but many of them went bankrupt simply due to the fact they had no

well thought out plans,and loyal feelings towards helping one another. Tragic events that

Rwanda went throughworsened the already precarious situation of cooperatives. In Rwanda

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Cooperatives were unsteadily established from the colonial era up to post -colonial era.

Cooperatives helped colonizers to enrich their home countries during the colonial

period(Mubirigi, 2016). During the post –colonial period, politicians made use of

cooperatives as tools for executing its policies and plans, hence turning out to be an

instrument for politicians(RCA, 2012). In addition, the government and its partners

encouraged the attitudes of dependencyfor political purpose to the extent that cooperatives

and associations founded would benefit from their support. As a result, lots of members fell

into the trap of taking a cooperative as a gateway to different kinds of support of benefactors

instead of viewing it as something that can yield its own fruit(Mubirigi, 2016).

In Rwanda, a number of stumbling blocks to cooperative progress are also identifiable and

can be grouped into: structure of cooperative, governance structure, and government

interventions(Mubirigi, 2016). Though some people attempted to investigate the motives for

poor performance in some types of cooperatives in Rwanda, no one discussed factors related

to cooperative performance by function, experience, age distribution etc. It is self-evident that

the aforementioned reasons differ from one type of cooperative to another, one region to

another, etc. For instance, the problems facing commercial cooperatives can differ from the

ones of service cooperatives. In this regard, problems facing cooperatives of the same type

may vary from region to region.

To this end, there is a need to conduct a study which addresses factors that hinder

performance of cooperatives in Rwanda -Gasabo District shall be used as a case study.

However, if such a study is not done, there is a strong likelihood that we will continue to see

cooperatives registering in large numbers, but at the end of the day find very few of them

operating and prospering

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1.2. Statement of the Problem

Though a lot has been done in the creation of cooperatives in Rwanda, some of the

cooperatives face a problem of low performance due to different factors. This is evidenced by

cooperative members’ dissatisfactions and lamentations that we hear every day on Radios and

Televisions about poor performance of their cooperatives. Low involvement of cooperative

members in decisions affecting their cooperatives remains a challenge. The extent to which

government, especially local government officials get involved in the cooperative leadership

and management was also a challenge. Ineffective use both human and financial resources

coupled with lack of clear and shared vision still persist in some cooperatives. In this regard,

it was revealed by RCA (Rwanda Cooperative Agency) that 1.9 billion was embezzled in

credit and savings cooperatives, while 1.3 billion was embezzled in other types of

cooperatives. This was due to the lack of managerial skills, robbery and fraud, misuse and

abuse of cooperatives funds and properties to mention but a few. Furthermore, limited

leadership and management skills that result into poor quality services and products are other

challenges that are affecting the way cooperatives perform. Therefore, challenges affecting

cooperatives functioning in Gasabo District need attentive and deep analysis in order to

propose appropriate recommendations.

1.3. Study Objectives

• General objective
Generally, the study will investigate and determine factors affecting the performance of

cooperatives in Gasabo District.

• Specific objectives

Specifically, this research will:

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1. Determine the cooperative governance related factors that affect negatively the

performance of cooperatives in Gasabo District;

2. Assess the cooperative managerial related factors that affect negatively the performance of

cooperatives in Gasabo District;

3. Determine government intervention related factors which weaken the performance of

cooperatives in Gasabo District.

1.4. Research questions

This research shall provide answers to the following questions:

The major research question to be answered by the study is: What are the factors that affect

negatively the performance of cooperatives in Gasabo District?

From the above main question, three specific questions are formulated:

1. What are the cooperative governance factors which affect the performance of cooperatives

in Gasabo District?

2. What are the cooperative managerial related factors which affect the performance of

cooperatives in Gasabo District?

3. To what extent does government involvement affect the cooperative performance in

Gasabo District?

1.5. Study Significance

Cooperatives play an important role to develop the country. Therefore, this role is significant

if cooperatives are functioning and performing well. Non-performing cooperatives affect not

only their existence and sustainability, but also hinder the country from developing socially
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and economically. Though most cooperatives in Gasabo District operate and perform well,

but there are others which poorly perform and end up to partial or total failure. The factors

which may hinder the performance of some cooperatives in Gasabo District need to be

investigated and this study is undertaken for this endeavor.

Furthermore, the relevance of this study is as follows:

First and foremost, this study is an important tool for policy makers in cooperatives related

matters, because it identifies the factors of poor performance of cooperatives in Gasabo

District. Thus, policy makers, especially those in charge of cooperatives can elaborate

evidence–based strategies.

Secondly, this study is useful to Non-Government Organizations, Civil Society Organizations

that would advocate for changes as to the policies regulating the organization and functioning

of cooperatives. Thirdly, this study is useful to research and academic institutions as well as

future researchers in cooperatives, because it will serve as one of the references. Fourthly,

this study helps the researcher to understand the challenges facing Rwandan cooperatives

generally and Gasabo District in particular. Last but not least, this study is significant to

cooperative members as it reveals the problems facing their cooperatives and proposes

recommendations that can help to sort out the identified problems.

1.6.Study Scope

Scientific scope

The study investigated factors affecting the cooperatives performance in Gasabo District,

and specifically in Remera sector. This research was scientifically carried out and the

findings were scientifically proven, because were anchored on the views given by authorities
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in charge of cooperatives, cooperative managers, cooperative leaders, as well as cooperative

members. The data were collected through proven scientific research instruments.

Time scope

The cooperatives under study were the ones with at least five-year work experience (i.e. those

registered up to 2012). Therefore, this study covered the period from 2012 to 2018. The year

2018 corresponds to the year whereby primary data were collected.

Domain scope

It is well known that a number of factors can hinder the functioning of cooperatives. To this

end, this study focused on three factors, namely: cooperative governance, cooperative

management and government involvement.

Geographic scope

This study was conducted in Gasabo District in the City of Kigali, Republic of Rwanda.

Gasabo District was not chosen by happenstance but because it was one of the Districts

situated in the City of Kigali whereby different types of cooperatives in different domains

(transport, agriculture, trade, construction, savings and credit etc.) are found. Also, because

members are urban people, it is supposed that they have a certain level of understanding on

the functioning of cooperatives and factors which may affect negatively the performance of

cooperatives. Last but not least, the choice was motivated by the fact that the researcher heard

for many times via radios (especially, Radio 1, Radio 10 and Radio Rwanda) citizens’

complaints about poor performance of cooperatives in Gasabo District.

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1.7. Limitations

The following limitations were experienced in the course of research:

Reluctance as well as poor cooperation of some respondents were the first research

limitation. As to this limitation, the researcher was prepared in advance and tried to explain

and persuade respondents to participate in the survey. The second limitation was lack of some

information due to staff turnover or biased records keeping techniques or methods. As far as

this limitation is concerned, the researcher tried to give enough time to the respondents,

especially managers to be able look for the required information. The third and final

limitation was the absence of some informants due to being busy with other businesses.

Regarding this limitation, the researcherprovided enough time to the informants or looked for

other people in the same institutions who likely had the needed information.

1.8. Thestudy organization

This study has five chapters: the first chapter is introduction whereby the background of the

study, problem statement and study objectives are presented; the second chapter is Literature

review whereby key concepts are defined, theoretical review and empirical review are

discussed. The third Chapter isResearch methodology. In this chapter the main points

presented include the design of the study, population target and methods of sampling,

instruments of research and analysis of data. The chapter before last is aboutpresenting,

analyzing as well as interpreting data. The last chapter is the general conclusion as well as

recommendations. In this chapter the findings were summarized, conclusions were drawn and

Recommendations were formulated.

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CHAPTER II: LITERATURE REVIEW

2.1. Definitionof keyconcepts

In this study, there are two main concepts (performance, cooperative) that need to be

clarified.

2.1.1 Performance

Performance is considered as equal to organizational effectiveness, which represents the

degree to which an organization as a social system and considering limited resources, reaches

its goals without excessive effort by its members (Georgopoulos &Tannenbaum ,1957, as

cited in Pinteau, 2013). In this vein, a company performance can also be defined through a

collection of attributes that characterize it namely: a company that knows how to exploit a

gap and which therefore knows how to make a sound expansion, a well- managed company

that knows to minimize the productive cost, a company that knows to maintain its own

expansion and through its know-how of a genuine service for community(Labrousse, 1971, as

quoted in Pinteau,2013).

2.1.2. Cooperative

Cooperatives may be expressed as independent organizations of people brought together

voluntarily , with the aim of satisfying their needs; keeping in mind to run and control them

in a democratic and profitable way (Wanyama,2014).The above explanation clarifies that

cooperatives are not dependent of anyone person or organizations including governments but

rather they are owned and controlled by people who decided to join them. Peopledecide to

band together willingly, and they are allowed to join or leave. They should satisfy their needs
 10

and aspirations according to the wishes of the members; organizations formed without having

to primarily satisfy their own needs are not cooperatives(Birchall, 2003).

2.2. Literature review

Literature on cooperative is reviewed in the following sections

2.2.1 Principles of Cooperatives

Cooperatives across the globe generally work in accordance with similar main rules,

regulations and values, Principles of cooperativesare anchored on to the first modern

cooperative created in Rochdale, England in 1844. However, a cooperative is sustainable

when it fully implements all 7 cooperative principles, maintains ecosystem and is a viable

business (ICA, 2013).

2.2.1.1 Voluntary and Open Membership

The principle number one means that any one ready to comply with responsibilitiesand

obligations of membership is welcome to join the cooperative without any form of

discrimination(Birchall, 2003 ,ICA, 2013,Wanyama et al., 2014).

2.2.1.2 Democratic Member Control

The principle number two that is democratic member control implies that members of

cooperatives are the ones to democratically run and control their cooperatives. Cooperative

members should take part in policy setting and decision making processes. Therefore,

elected cooperative leaders should always be accountable to the cooperative members(ICA,

2013,Wanyama et al., 2014).

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2.2.1.3 Member Economic Participation

The principle number three which is member economic participation means that cooperative

members give the same contribution and they are the ones to benefit the fruits borne by their

respective cooperative(Khumalo, 2014, Wanyama et al., 2014 ).

2.2.1.4 Autonomy and Independence

The principle number four means that if cooperatives have to go into any form of agreement

with other organizations including governments, they have to seek approval of their members

to make sure that they still keep their independence and autonomy(ICA, 2013,Wanyama et

al., 2014 ).

2.2.1.5 Education, Training and Information

The principle number five means that cooperatives should keep their members and staff

educated, informed and trained with the aim of making their organization and society at large

a success(Wanyama, et al., 2014).

2.2. 1.6 Cooperation among Cooperatives

The principle number six that is cooperation among cooperatives implies that cooperatives

have the responsibility to help each other and provide quality services. In this regard, they

should band together in all possible tiers and frameworks likely promote the culture of

supporting one another(Khumalo, 2014).

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2.2.7. Concern for Community

The principle number seven which is the concern for community, means that cooperatives

should strive for the environmental and socio-economic well-being of their

communities(Wanyama, et al., 2014).

2.2.2 Types of cooperatives

Cooperativesare divided into five main types namely: (i) production cooperatives; (ii)

Commercial and consumer cooperatives; (iii) Savings and credit cooperatives; (iv) Service

cooperatives; (v) Multipurpose cooperatives(Birchall, 2003).

2.2.3 Factors influencing the cooperatives to succeed or fail

Factors that influence cooperatives to fail or succeed are explained differently according to

different authors. However, people have not yet agreed on the conditions that clearly

determine success and failure of cooperative(Hammond & Luiz, 2016). Therefore, the

internal and external factors can make cooperatives succeed or fail:

2.2.3.1. Internal Factors

• Cooperative Initiator and Leadership

Cooperative initiator and leadership are of paramount importance as to causing the

cooperative to succeed or fail. To this end, a visionary,innovative, communicative,

hardworking, business and openminded cooperative initiator or leader plays a very important

part to make the cooperative succeed(Garnevska, Liu, & Shadbolt 2011).

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• Membership participation

Cooperative members play a big part in the success of failure of cooperatives. Against this

backdrop, cooperative members who actively take part in decisions affecting the lives of their

cooperative are very instrumental in making their cooperative a success (Garnevska et

al.,2011).

• Cooperative Governance

Cooperative governance is instrumental in the success or failure of cooperatives. From this

perspective, the well-informed cooperative governance structure plays a pivotal part in

making it succeed or fail(Chaddad & Cook, 2004). Thishas something to do with how

cooperative members, leaders and managers collaborate(Mardiasmo, Barnes, & Sakurai,

2001). In this regard, the functioning of cooperatives as business organizations exacts a

democratic governance system. This entails that cooperative members actively take part in

decisions affecting their cooperative lives(Nkhoma, 2011).

• Cooperative Management

Cooperative management is an essential ingredient to the success or failure of cooperatives.

According to Chloupková ( 2002), for cooperatives to be a success they should be organized

on interests that are really homogenous. Literature disclosed that management of cooperatives

is instrumental in making them succeed or fail. Indicators, such as strong finance, good

revenues , capacity in marketing, business planning and management lead to the well -being

of cooperative(Garnevska et al., 2011).

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• Communication

Communication is an important tool as to the success or failure of cooperative.

Communication between cooperative management and members is an important factor in

running a successful cooperative (Makri, Skandalou, Manthou& Vlachopoulou, 2011).

Inappropriate communication among members, the board of directors, management and

community as the primary reason for cooperative to go bankrupt(Ortmann & King, 2007).

Members become distant and inactive within the organization if they do not receive the

information to clearly understand the cooperative value package (ARNALL, 2016).

• Trust

Trust is crucial for any organization to succeed. For a cooperative to be successful , the trust-

building process should always be strengthened(Simmons & Birchall, 2008).

• Knowledge sharing

The cooperativesdemandamong other things marketing skills in order to be able function

well(Hammond & Luiz, 2016). To this end, cooperatives may fail, because of members who

aredisengaged for the mere fact that they are not educated rather than motivated. Therefore,

educated people very instrumental inmaking cooperatives successful(Birchall, 2011).

2.2.3.2 Factors that are external

• Involvement of Government

Involvement of government is a crucial determinant that leads to success or failure of

cooperatives(Hammond & Luiz, 2016). In western world, cooperatives are independent of

government and they govern themselves according the needs of their members(Johnson
 15

&Shaw, 2014). Across less developed countries , it is the other way round, because

cooperatives were mainly developed by States which do not prioritize cooperative members

needs but rather put states interests first(Hammond & Luiz, 2016). This way of doing things

by states in the third world has caused failure of cooperativesin these countries(Johnson &

Shaw, 2014). Governments part should be to ensure that political, legal and administrative

platforms are in place to help cooperatives develop(Hammond & Luiz, 2016). Government

entities should also help cooperatives to be awarded tenders and other business

opportunities(Vladimirov, Simeonova-Ganeva, & Ganev, 2013). Therefore, the cooperation

with different partners can be crucial just in case there is no interference in cooperative

businesses(Hammond & Luiz, 2016).

2.2.4 Reasons and benefits for joining cooperatives:

There are so many reasons that prompt people to join cooperatives. Cooperatives are one of

economic actors that have proved to provide jobs and boost the economy when business

opportunities are good or not(Gicheru, 2015). The benefits of cooperative organizations

extend to all members of the society by providing jobs, building capacities, making

investments, and building schools to educate people(Hussain, 2014). However, joining

cooperatives enables people to combine forces and increase their chances of competition and

later on be able to reach what they would not achieve individually (Birchall, 2003).

Besides what cooperatives extend to their members, they contribute a lot tothe welfare of

communities in their area of operation (Dogarawa, 2010). Therefore the developing

cooperatives should be given top priority for the sake of real progress(Hussain, 2014).
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Summary

Chapter two clarified some literature on cooperatives. Types of cooperatives were described,

as well as universal principles guiding the cooperatives. The most important part of the

chapter was the description of factors affecting the performance of cooperatives. The factors

affecting the cooperatives were grouped in two categories: factors that are internal and factors

that are external.

Internal factors that affect cooperative performance are among other things: (i) cooperative

leadership – Bad or poor leadership affects the performance of cooperatives. The

cooperatives led by managers or leaders who have no clear and long vision for the

cooperatives are likely to collapse; (ii) members’ participation or involvement in the

management of cooperatives – cooperatives where members are inactive observers and are

not involved in the decision-making risk are exposed to failures, because managers are not

held accountable (there is a lack of responsibility and accountability); (iii) cooperative

management – poor management which results into embezzlement, corruption, misuse of

cooperatives resources and assets leads to cooperative failures; (iv) communication and trust

– poor communication and mistrust among cooperative members and between managers and

members are the causes of poor performance of cooperatives. The external factors affecting

the performance of cooperatives include: (i) government involvement – extreme government

involvement in the management of cooperative affects the performance of cooperatives.

Though the literature shows the factors affecting cooperative functioning, it does not show

which amongexternal and internal factors affect more the performance of cooperatives. The

literature does not show which the main factors are and the extent to which cooperatives can
 17

be challenged according their classification. Again, the literature does not show the impact of

climate change, political instability (civil wars), Doing Business Index, Globalization, and

Technology, especially Internet on the performance of cooperatives. The next chapter

clarifies the methods tapped into in the course of research.

 18

CHAPTER III: RESEARCH METHODOLOGY

This chapter explains methods utilised with the aim of reaching research objectives. It

presents study design, study population, size of the sample and procedures of sampling,

instruments of research as well as techniques of analysing data.

3.1 Description of study area (Gasabo District)

Gasabo district is located in the North East of Kigali City Province and bordered by Kicukiro

district (South), Nyarugenge (West), Rwamagana (East) and Rulindo and Gicumbi (North).

The Gasabo District has 15 Sectors, namely Bumbogo, Gatsata, Gikomero, Gisozi, Jabana, Jali,

Kacyiru, Kimihurura, Kimironko, Kinyinya, Ndera, Nduba, Remera, Rusororo, Rutunga.The

district’s landscape or surface area is 430.30 km2of which 90% represent rural zone as

indicated in the district graph below with the green line separating rural and urban areas.

According to the preliminary results of the 4thpopulation and Housing census (2012)

indicated that Gasabo district has a population of 530,907 representing 46.8% of the total

population for Kigali City (1,135,428 population) and 5% of the total national population

(10,537,222). At the districts level comparisons, Gasabo and Nyagatare are the districts with

the highest population constituting 5.0% and 4.2% of the total population (Gasabo District,

2018)

3.2 Study design

This research is critical analysis design.This study also adopts descriptive design to provide a

picture of the situation and explain current operations of cooperatives and finally make

judgment. The descriptive design assisted in determining the strengths and weaknesses of

cooperatives, but also to show the opportunities and threats to how cooperatives perform in

Gasabo district.
 19

Critical analysis design assisted the researcher to investigate and determine how governance

related factors, managerial related factors and government interventions in the operations of

cooperatives impacted the performance of cooperatives in Gasabo district.

In as far as research approach is concerned for this study; mixed method approach was used.

In other words, information was collected and analyzed quantitatively and qualitativelyfor

this study. Data collected quantitatively supplemented and substantiated by qualitative data

and this increased the validity and reliability of research findings.

3.3Population study

The populationtargeted in this study is all registered cooperatives in Gasabo district. The

table 1 in appendix shows that the number of registered cooperatives in Gasabo district is513.

3.4 Sampling procedures

In this study, we tapped into judgmental or purposive way of sampling to choose the study

sample. At first stage, some criteria were set by the researcher in order to have reasonable

number of cooperatives which were concerned by the study. The first criterion was selecting

one sector which has many cooperatives in Gasabo district. Following this criterion, Remera

sector was selected, because it has sixty three(63) registered cooperatives. The second

criterion is selecting cooperatives with at least 5 years of experience. Five years of experience

were considered, because the researcher assumes that members of cooperatives which fall in

this category have more understanding on the functioning of cooperatives, have experienced

bad or good experiences in cooperatives and may have accurate judgements on the factors

that affect the performance of cooperatives in Gasabo district. Following this criterion, 32

cooperatives were selected in Remera sector. Lastly, the researcher selected limited number

of cooperatives representing each domain of intervention. As shown in the table (appendix

 20

1), those thirty-two (32) cooperatives operate in different domains as follow: Production

(twelve (12) cooperatives); Commercial and consumer (four (4) cooperatives); Savings and

credit (one (1) Cooperative); Services (fourteen (14) cooperatives); and Multipurpose (one

(1) cooperative). To have a representative sample whereby cooperatives operating in different

domains are represented, we selected: two (2) cooperatives operating in production domain,

one (1) cooperative in Commercial and consumer domain, one (1) cooperative in savings and

credit domain, two (2) cooperatives in services domain and 1 multipurpose cooperative were

concerned. In total, seven (7) cooperatives operating in different domains were randomly

selected. The number of selected cooperatives (either 1or 2) depended on their numbers. For

instance, cooperatives operating in production domain are many compared to the cooperative

operating in savings and credit domain.

3.4. Sample size and selection process

As each cooperative has a Board (management part) and cooperative members, the sample

were randomly selected from these two categories. For the first category (board members),

three (3) members were selected in each cooperative, making a total of twenty -one (21)

board members. For the second category (cooperative members), ten (10) members chosen

randomly in each cooperative, makingseventy (70) cooperative members. Because the

researcher wanted the views from different categories of people, variables such experience in

the cooperative, education level, age and gender of respondents weretaken into account. In

total, a sample size of ninety-one (91) respondents were selected and used in this study. This

size is adequate as (Matata, Ajayil, Oduol, & Agumya, 2008) state that in socio-economic

studies, a sample size of 80 to 120 respondents is adequate.

Furthermore, 5 key informants were purposively selected for interviews, namely 2 people at

sector level (1 person in charge of cooperative and Executive Secretary), and 3 people at
 21

District level (District cooperative officer, Director of Business Development, as well as Vice

Mayor in charge of Economic Development). The interview session with the aforementioned

key informants is very important, because they hold rich and accurate information on the

functioning and performance of cooperatives.

Considering the research objectives, three categories of respondents were targeted and

provided different information. For instance, for the main objective that had something to do

with determiningthe factors which affect the way cooperatives perform in Gasabo District, 21

Board members, 70 ordinary cooperatives members and 5 key informants provided

information. For the objective which aimed at determining the cooperative governance

factors which affect negatively the performance of cooperatives in Gasabo District, all

categories of respondents (Board members, ordinary members and key informants) provided

information. For the objective which aimed at assessing the cooperative managerial factors

which affect negatively the performance of cooperatives in Gasabo, all categories of

respondents were concerned and provided relevant information. For the last objective which

focused on determining government intervention related factors which weaken the

performance of cooperatives in Gasabo district, only two categories (Board members and key

informants) were approached and provided information. Last but not least, three categories of

respondents intervened in proposing the recommendations for effective operational and

performance of cooperatives in Gasabo district.

3.5. Data collection instruments

To collect data, triangulation of data collection techniques was used, namely documentary,

questionnaire (Survey) and interviews.

 22

3.5.1. Primary data

Generally, primary source of information is gathered by means of the questionnaires,

interviews and where necessary guided observations. In this study, primary

48p-;8 informationwas mainly gathered by means of questionnaire and semi-structured face-

to-face interviews.

3.5.1.1. Questionnaire

Format of questionnaire

The form and wording of questions used in the questionnaire are extremely important

because they impact the kind and quality of information garnered from the informant.For this

study, both open-ended and closed questions were resorted to, but closed ended questions

were dominant.

Content of the questionnaire

The questions in the questionnaire were elaborated in accordance with

researchobjectivequestions of study. In this regard, the researcher ensured that questions

asked would help to determine: (i) cooperative governance related factors which affect the

performance of cooperatives; (ii) cooperative managerial related factors which affect

performance of cooperatives; (iii) government intervention (interference) related factors

which affect the performance of cooperatives; and (iv) Strategies to be taken to ensure full

operational and performance of cooperatives in Gasabo district. In addition, demographic

information, such as age, education level and gender were included.

 23

Pre-testing the questionnaire

Questionnaire pretesting implies that questions are clearly formulated to the extent that

informants can easily understand them. The research instrument for this study was pre-tested.

In this regard, the researcher selected randomly 3 respondents (members of cooperatives)

from Kacyiru Sector of Gasabo district and gave them the questionnaire and requested to

answer it. By testing the questionnaire, unclear and ambiguous questions were corrected

before field-work.

Administering the questionnaire

The questionnaire had a covering letter which briefly: (i) introduce the researcher and the

institution he is representing; (ii) Explain clearly the research purpose and rationale;(iii)

Convey general instructions; (iv) Give assurance to the informants that their answers will

only be used for research purposes; (v) Acknowledge their invaluable contribution to the

research.

In addition, questionnaires were self-administered to 91 respondents and due to timeline the

researcher trained 1 field assistant and he was utilized to speed up the collection of data. The

questionnaires were translated in Kinyarwanda just for communication purpose.

3.5.1.2 Semi-structured face-to-face interviews

A list of questions (open ended) was prepared beforehand. During interview, the researcher

was flexible in the way questions are ordered and asked and all were aimed to collect as

much information as possible. The semi-structured face-to-face interview concerned 5

aforementioned key informants. The questions in the interview guide focused on cooperative

governance factors, cooperative managerial factors, government interference factors that

 24

affect the performance of cooperatives in Gasabo district. By way of winding up the

interview, informants had the chance of proposing strategies which can be taken to streamline

the functioning of cooperatives in order to maximize their performance.

3.5.2 Secondary data

The secondary information to utilize in this study was gathered through documentary

research and came from diverse sources, mainly the government policies on cooperatives and

reports related to the issue of cooperatives in Rwanda. Books, articles from journals on

cooperative, dissertations and theses done in the domain of cooperative were consulted. Last

but not least, Internet sources were of significant importance. The researcher focused on

cooperative related issues when consulting electronic sources.

3.6. Variables and variable measurements

In this study, 4 types of variables were concerned and the questionnaire was developed in

way that data for these 4 variables are collected.

The first variable concerns the demographic information of respondents. The variable

measurement was closed ended questions whereby respondents provided information related

to his/her age, level of education etc.

The second variable concerns cooperative governance related factors that affect performance

of cooperative. In this vein, Likert’ scale measurements were used. Scale from 1 – 5 (where

1 means strongly disagree, 2 means disagree, 3 means neutral, 4 means agree and 5 means

strongly agree) were used. Furthermore, scales such as Excellent, Verygood, Good, Fair,

Poor and Very poor were used.

 25

The third variable concerns cooperative managerial related factors that affect performance of

cooperative. In this regard, Likert’ scale measurements were used. Scale from 1 to 5 (where

1means strongly disagree, 2 means disagree, 3 means neutral, 4 means agree and 5 means

strongly agree) were used. In addition, scales such as Very skilled, Skilled, Fairly-skilled

were also used.

The fourth variable concerns government involvement related factors that affect performance

of cooperative. In this regard, Likert’ scale measurements were used. Scale from 1 to 5

(where 1means strongly disagree, 2 means disagree, 3 means neutral, 4 means agree and 5

means strongly agree) were used. In addition, scales such as Always, Sometimes, Rarely

and Never were used as well.

The fifth variable concerns strategies to streamline cooperatives in order to maximize their

performance. For this variable, open ended questions were used to allow respondents to be

creative and innovative in proposing strategies.

3.7 . Data analysis

The process of data processing and analysis went as follows:

3.7.1. Editing

Editing helped the researcher to discover and minimize all sorts of loopholes from the data

collected from informants.

 26

3.7.2. Coding

This process followed the following steps: coding the questionnaire; and finally verification.

The code from number 1 to 91 was written on the questionnaire. The coding aimed at

facilitating data entry in the computer. The coding helped to ensure that all the data are

entered and data are not duplicated when entering them.

3.7.3 Statistical analysis

The Statistical Package of Social Sciences (SPSS) and Microsoft Excel were utilized. They

assisted in calculating the percentages, frequencies and in generating tables, pie charts,

histograms and graphs.

To analyze and interpret qualitative data from interviews, main themes were identified and

coded. Qualitative information was classified under the main themes and then, put into the

report. The qualitative data were integrated in the report to supplement the quantitative

information or data.

3.8 Ethical considerations

Ethics involves considering and taking into account the best code of behavior when dealing

with other people to avoid negative effects on them in the process. To this end, the researcher

got an official letter of University of Rwanda and submitted it to Gasabo District

administration in order to get another permission allowing him to collect data. The researcher

sought consent from informants and ensured them that information provided would only be

utilized for study ends.

 27

CHAPTER IV: PRESENTATION AND INTERPRETATION OF DATA

4.1 . Introduction

Through empirical data collected from the field, factors undermining the performance of

cooperatives in Gasabo District are identified. Those factors are categorized into: (i)

cooperative governance factors; (ii) cooperative managerial related factors; and (iii)

government involvement in the functioning of cooperatives. Overall, ninety-one (91)

respondents from seven (7) cooperatives in terms of thirteen (13) respondents per cooperative

participated in the survey. The cooperatives concerned by the survey were: Abihanganyeba

Remera, COTAHAMA, FEDECO, IjaboRemera SACCO and KOAIMU.

4.2 . Characteristics of respondents

The characteristics of respondents considered are: Age, Sex and Education level of

respondents. All these variables may have an interpretation on the performance of

cooperatives, but also on the compliance to the government policy which aims at promoting

and enhancing the role of the youth and females in the development of the country. The table

1 below presents the characteristics of respondents.

 28

Table 1: Characteristics of respondents

Variable Categories Frequency Percentage

Age 18-30 31 34.1

31 and above 60 65.9

Total 91 100.0

Sex Male 47 51.6

Female 44 48.4

Total 91 100.0

Level of education Primary 51 56.0

of respondents Secondary 23 25.3

Tertiary 1 1.1

Other 16 17.6

Total 91 100.0

Source: Research findings, November 2018

Age of respondents

For the age of respondents,the dummy variable was considered, because the researcher

wanted to consider the views of the youth and the views of adult people in cooperatives. In

Rwanda, youth is defined as young person between the ages of 16 and 30 years (NISR,

2017). People above 30 years old are no longer youth, but adult. According to figure 2,

majority of respondents have 31 years old and above. This means that a considerable number

of cooperatives in Gasabo district are created by people between 31 and above. However,

non-negligible percentages (34.1%) of youth are members of cooperatives. This shows that

the youth starts to understand cooperatives significance for their well-being as well as the

country.
 29

Sex of respondents

The Constitution of the government of Rwanda on gender emancipation states that in all

sectors of socio, political and economic, females should at least be represented or present at

30%. The government wishes and encourages the presence of females in socio-economic

activities, especially in income generating activities. The table 1 above shows that females

represent 48.4% in surveyed cooperatives. However, this percentage must be increased to

52% to match with their share in general population of Rwanda which is 52% (NISR,

2012).RCA report(2018), indicates that three million eight hundred sixteen and three hundred

thirty-six (3,816,336) are members of cooperatives countrywide. Number of Males is

2,129,549 which represent 55.9%, while the number of females is 1,686,787 which represent

44.1%. In Kigali City (KC), total number of members of cooperatives is 365,339 whereby

males are 204,687 representing 56.1%, while females are 160,652 representing 43.9%.

Comparing these figures and figures of the survey, one may see that the data in figure 3

reflect to some extent the reality on the ground.

Level of education of respondents

Education is very instrumental in the way cooperatives perform. In this regard, Hussain

(2014) statesthe more people are educated, the more likely the performance and success of

cooperative. Members of cooperative who have a certain (high) level of education may share

experiences, monitor and control cooperative’ properties and cooperative’ finances more than

uneducated members. Again, developing strategies for development and marketing might be

easier for educated members than uneducated.

The data in table 1 indicate clearly that a big number of informants has primary education

(56%) and Secondary education (25.3%). Other 17.6% did not complete either primary
 30

school or secondaary school. Overall, thee level of education

e o respondennts is low and this
of

might be
b one of thhe factors causing poorr management which results
r to pooor perform
mance of

cooperaatives in Gaasabo districct in generall, and particcularly in Remera sectoor.

Years of exxperience in cooperattive

Expperience of respondentts in cooperrative was assessed

a as it ensures to some ex
xtent the

hat responddents who hhave experiences in

valiidity of infoormation, beecause it iss assumed th

coopperatives know
k the prroblems thaat cooperatiives are faccing than tthose who are new

mem
mbers.

Figure 1: Years of experiencce in cooperrative

Source: Research findings, November 20018

The Figgure 1 show pondents in cooperativves. The daata show

ws the yearss of experieence of resp

that maajority of 633.6% have more than 5 years of experience.. This is ann indication that the

responddents had ennough and consistent information

i n on the funnctioning off their coop
peratives

and on the
t causes of
o poor perfformance off cooperativ
ves.
 31

4.3 Facctors affectiing the perrformance of cooperattives in Gassabo districct

4.3.1 Cooperativee governancce-related factors

The pooor perform

mance of coooperatives may resultt from the way (s) thhe cooperattives are

governeed. This stuudy identified governaance related

d factors whhich affect tthe perform
mance of

surveyeed cooperatiives.

The firsst governannce-related factor

f is “Aw
wareness on
n mission and vision off cooperativve”. The

level off awarenesss of membeers of coopeeratives dettermines theeir level off interventio
on in the

governaance and maanagement of cooperattives. You cannot

c interrvene in som
mething you
u are not

aware of.
o You cannnot hold leaaders or maanagers acco
ountable if you
y don’t kknow the miission or

vision of
o your cooperatives. You
Y can’t know
k if they
y are deviatiing from thhe mission or
o vision

of the cooperative
c if you don’t know as member thee vision andd mission oof your coop
perative.

Therefoore, awarenness on misssion and vision

v of cooperative
c by membeers is a parramount

governaance-relatedd factor which

w was considered in this sttudy. It enntails the level
l of

transparrency in thee cooperativve.

Figure 2: Awaren
ness level on
n the vision
n and missiion of their cooperativve

Source: Research findings, November 20018

 32

According to figurre 2, majoriity of aboutt 58.3% hav

ve poor knoowledge or do not kno
ow at all

the vision and mission of theiir cooperativves. Only 14.3% have very good or good kno
owledge

about thhe vision annd mission of their coooperatives. Generally,

G l
lack or low
w level of aw
wareness

on the vision
v and mission
m of their coopeeratives, as shown in fiigure 2 is oone of the causes of

memberrs’ disengaggement tow

wards their cooperatives
c s which leadds to poor pperformancee.

Figure 3: Frequeency of meeetings (Gen

neral assem
mbly) organiized by thee cooperativ
ve

Source: Research findings, November 20018

The datta in figure 3 show thaat majority (45.1%) saiid that the general
g asseembly meettings are

organizzed four tim

mes in a yeaar (quarterlyy), while 31
1.9% said thhat the geneeral assemb
bly takes

place tw
wice a yeaar. All mem
mbers are entitled
e to take part in
i all meettings or sen
nd their

represenntatives (A
Art 49 of Law
L on cooperatives in Rwandaa). Art 51 of the sam
me Law

stipulates that the cooperativee general asssembly tak

kes place in ordinary annd special sessions.
s

From provisions sttated abovee in the Law

w governing
g the cooperratives, it iss clear that majority
m

of coopperatives coomply withh the Law. The rest of

o the quesstion is to know wheether the

suggesttions given by the meembers of cooperativees in generral assembllies are tak

ken into
 33

accountt by the Booard in the final

f decisioon-making. Furthermoore, it is woorth to menttion that

organizzing generall assembly four times in

i a year may
m be borinng and wastte of time for
f some

memberrs, unless thhey are urgeent and burnning issues to

t debate onn.

Figure 4: Memberrs’ particip

pation in deecision-mak
king

Source: Research findings, November 20018

According to figurre 4, big majority

m of 73.6%
7 conffirmed that members oof cooperattives are

mes consultted by the Board

sometim B or othher committtees beforee taking deccisions that concern

them. Another
A nonn-negligiblee percentagee of 16.5% said that thhey are rareely consulteed or not

consulteed at all. Onnly 9.9% coonfirmed thhat they are always connsulted. Gennerally, coo
operative

memberrs should be
b consultedd always beefore taking
g decisions that
t concernn them. Wh
hen they

are assoociated in decision-mak

d king, they own
o those decisions
d annd they are aactively eng
gaged in

their im
mplementatiion. Basing on the extent at whicch memberss of surveyeed cooperattives are

associatted in decission-makingg that conceerns them (see figure 4),

4 the reseaarcher realiized that

there iss a governnance gap and

a that might
m have led or leadding to poor perform
mance of

cooperaatives in Gaasabo districct.

 34

Figure 5: Extent to which members’ op

pinions aree taken intoo account in
n decision-m
making

Source: Research findings, November 20018

Being innvited in geeneral assem

mbly and haaving been consulted
c annd give opinnions is onee aspect,

but ensuuring that thhe opinionss, suggestionns proposed

d are considdered is another very im
mportant

aspect. Figure 4 shhowed that general

g asseemblies aree scheduled according tto the previisions of

the Law
w. However, data in Figure
F 5 abbove show that suggeestions, opinnions, expeectations

raised or
o proposed by the coopperative meembers in th
he general assembly
a annd in other meetings
m

are som
metimes connsidered by the board or
o other com
mmittees. Only
O 11% cconfirmed th
hat their

suggesttions, opinioons are alw

ways taken into
i accoun
nt. In the sittuation like this, memb
bers feel

underesstimated annd that leads to demotiivation and

d disengagement. Alsoo, this situattion can

lead to misundersttandings, suuspicions, mistrusts,

m conflicts andd finally pooor perform
mance of

the coopperative.

From thhe above daata in the figgure 5, the researcher realized thaat there is a governance gap in

engaginng fully thee cooperativve memberss in the decision-makiing. This aaffects certaainly the

perform
mance of coooperatives.
 35

Table 2: Extent to which cooperative guiding principles are made and expected by

members

They are excellently made and Frequency Percent Valid Percent

respected
Valid Strongly disagree 23 25.3 25.3
Disagree 68 74.7 74.7
Total 91 100.0 100.0
They are very well made and Frequency Percent Valid Percent
respected
Valid Strongly disagree 8 8.8 8.8
Disagree 79 86.8 86.8
Strongly agree 4 4.4 4.4
Total 91 100.0 100.0
They are well made and Frequency Percent Valid Percent
respected
Valid Strongly disagree 1 1.1 1.1
Disagree 49 53.8 53.8
Neutral 13 14.3 14.3
Agree 10 11.0 11.0
Strongly agree 18 19.8 19.8
Total 91 100.0 100.0
They are fairly made and Frequency Percent Valid Percent
respected
Valid Disagree 28 30.8 30.8
Neutral 10 11.0 11.0
Agree 11 12.1 12.1
Strongly agree 42 46.2 46.2
Total 91 100.0 100.0
They are poorly made and Frequency Percent Valid Percent
respected
Valid Strongly disagree 2 2.2 2.2
Disagree 77 84.6 84.6
Neutral 8 8.8 8.8
Agree 2 2.2 2.2
Strongly agree 2 2.2 2.2
Total 91 100.0 100.0
They do not exist Frequency Percent Valid Percent
Valid Strongly disagree 5 5.5 5.5
Disagree 85 93.4 93.4
Agree 1 1.1 1.1
Total 91 100.0 100.0
Source: Research findings, November 2018
 36

In this study, a question was asked to check whether cooperatives in Gasabo district have set

guiding principles and whether those principles are respected by every member in a

cooperative. The findings in the second table indicate that (see colored data in the table) the

guiding principles exist, but they are fairly made and respected as it was confirmed by 58.3%.

This means that 42.7% of respondents observe some loopholes in the establishment of those

guiding principles and in their implementation. Well- established and clear guiding principles

help to avoid ambiguous interpretation and conflicts. Ambiguous guiding principles affect the

performance of cooperative as some serve their own interests instead of those of cooperative

members because of unclear guiding principles.

In this context, one of interviewees said “Some cooperatives are led and managed by

dishonest and unethical people who enter in the cooperative and compete for leadership

positions, not to develop the cooperatives and members, but to embezzle money and serve

their own interests. This situation is worse in the cooperatives with no clear and binding

principles. They profit those loopholes and manage the cooperatives as their property”.
 37

Table 3: Level of relationship between cooperative members and cooperative leaders

The relationship is excellent (Excellent level of mutual Frequency Percent

trust, communication and mutual respect)
Valid Strongly disagree 17 18.7
Disagree 74 81.3
Total 91 100.0
The relationship is very good (Very high level of Frequency Percent
mutual trust, communication and respect)
Valid Strongly disagree 11 12.1
Disagree 77 84.6
Neutral 1 1.1
Strongly agree 2 2.2
Total 91 100.0
The relationship is good (High level of mutual trust, Frequency Percent
communication and respect)
Valid Strongly disagree 1 1.1
Disagree 58 63.7
Neutral 10 11.0
Agree 15 16.5
Strongly agree 7 7.7
Total 91 100.0
The relationship is fair (Average level of mutual trust, Frequency Percent
communication and respect)
Valid Disagree 37 40.7
Neutral 14 15.4
Agree 10 11.0
Strongly agree 30 33.0
Total 91 100.0
The relationship is poor (low level of mutual trust, Frequency Percent
communication and mutual respect)
Valid Disagree 59 64.8
Neutral 12 13.2
Agree 4 4.4
Strongly agree 16 17.6
Total 91 100.0
The relationship is very poor (very low level of mutual Frequency Percent
trust, communication and mutual respect)
Valid Strongly disagree 4 4.4
Disagree 76 83.5
Neutral 5 5.5
Strongly agree 6 6.6
Total 91 100.0
Source: Research findings, November 2018
 38

Good governance
g of a cooperative is characterize
c ed by goodd relationshhips betweeen board

memberrs and ordiinary membbers. Relatiionships aree deterioratted when thhere are su
uspicious

practicees (mismanaagement) by
b the boardd or other committees.
c The findinngs in table 3 show

the statuus of relatioonships bettween the board

b and co
ooperative members. O
Overall, fin
ndings in

table 3 show that 44%

4 of resppondents connfirmed (strrongly agree + agree) tthat the relaationship

is fair, 24.2%
2 conffirmed that the
t relationship is good
d and 22% confirmed
c tthat the relaationship

is poor.. None conffirmed that the relationnship is exccellent and very few (22%) confirm
med that

relationnship is veryy good.

From thhe figures above,

a one may
m realizee that the ex
xpected leveel of relatioonships whiich must
normallly characterrize the coopperative meembers is no
ot yet attainned. There iss a gap and this gap
might be
b one of the causes of poor performance
p es of cooperatives. W
When asked
d on the
challengges facing the
t cooperaatives, one of
o the interv
viewees saidd “Conflictss between members
m
of coopperatives arre the mainn challengee. These con
nflicts origiinate from the fact that some
memberrs, (especiaally board members)
m w
want to servve their ownn interests instead of common
c
interestt for all mem
mbers. Agaain, some coooperative leaders wannt to give aadvantages to some
memberrs and others feel penaalized etc.…
…These confflicts and misunderstan
m ndings lead
d to poor
perform
mance and tootal failure of cooperative”

Figure 6: Frequen
ncy of electtion of coop
perative com
mmittee

Source: Research findings, November 20018

 39

Board of directors must be voted by at least ¾ of all members in general assembly. Their time

in the position is determined by the Law governing cooperatives. Article 65 (Term of office

of the Board of Directors) stipulates that the mandate of the Board of Directors shall be three

(3) years. No one of the members of Board of Directors is allowed to be elected for more

than two (2) terms in office.

The results in figure 6 show that big majority of respondents (94%) said that the elections of

their leaders are held once every three years. On this point, it is clear that cooperatives

comply with the Law. However, openness or transparency and fairness of elections are very

important factors in the governance of cooperatives. The question was asked to check the

level of fairness of elections in cooperatives and the results are presented in the figure 7

below.

Figure 7: Fairness of election of committees

Fairness (transparency) of election of

committees

3%

Very fair
42% Fair
55%
Not fair

Source: Research findings, November 2018

Though the elections are organized regularly and in the compliance with the Law (see Figure
6), the fairness of those elections is still challenging. Majority of respondents (55%)
 40

confirm
med that elecctions are not
n fair or trransparent. Only 3% coonfirmed thhat the electtions are
very faiir. On this issue,
i one local
l authorrity intervieewed comm
mented “Elecction of com
mmittees
in somee cooperatiives is one of sourcess of disputees and com
mplaints wee are experriencing.
Unfair, non-transpparent elecctions have negative effects
e as thhose unfairrly elected are not
respecteed by otherr members and
a exercisiing leadersh
hip is difficuult in this case. In otheer cases,
memberrs are mannipulated too elect som
me people, even if theey don’t haave leadersship and
manageerial skills. Unfair and manipulateed electionss have negattive effects oon the perfo
ormance
of cooperatives”.

Figure 8: Training of cooperrative mem

mbers

Source: Research findings, November 20018

It is thee responsibility of coopperative to build

b the cap
pacities of its
i members through trrainings.

Cooperative must identify

i traiining needs of its mem
mbers and traain them to fil-in the gaaps. The

researchher assumess that inform

med cooperrative memb
ber is far beetter than unnformed or ignorant
i

memberr. Informedd member thhinks criticaally and can

n challenge things wheen they are not well

done.

The ressults in Figuure 8 show that traininngs are orgaanized for cooperative members. Majority
M
of 46.2% said thatt trainings are
a organizzed four tim
mes (quarterrly) in a year and this is good
 41

thing. However, on this point one of the interviewee said “ I do agree that trainings are
organized for members, but majority do not attend those trainings and some of the trainings
do not really match with members ‘needs and expectations if we consider what cooperative
does or expect to do”.
 42

Table 4: Extent at which cooperative leadership works for members’ common interests

Cooperative leadership outstandingly works and strives for members Frequency Valid
‘common interests Percent
Valid Strongly disagree 16 17.6
Disagree 72 79.1
Neutral 1 1.1
Agree 1 1.1
Strongly agree 1 1.1
Total 91 100.0
Cooperative leadership strives very well for members ‘common Frequency Valid
interests Percent
Valid Strongly disagree 9 9.9
Disagree 76 83.5
Neutral 4 4.4
Strongly agree 2 2.2
Total 91 100.0
Cooperative leadership works well and strives well for members Frequency Valid
‘common interests Percent
Valid Strongly disagree 1 1.1
Disagree 56 61.5
Neutral 7 7.7
Agree 13 14.3
Strongly agree 14 15.4
Total 91 100.0
Cooperative leadership works and strives fairly for members Frequency Valid
‘common interests Percent
Valid Disagree 24 26.4
Neutral 15 16.5
Agree 5 5.5
Strongly agree 47 51.6
Total 91 100.0
Cooperative leadership works and strives poorly for members Frequency Valid
‘common interests Percent
Valid Strongly disagree 2 2.2
Disagree 71 78.0
Neutral 11 12.1
Agree 3 3.3
Strongly agree 4 4.4
Total 91 100.0
Cooperative leadership works and strives very poorly for members Frequency Valid
‘common interests Percent
Valid Strongly disagree 3 3.3
Disagree 85 93.4
Neutral 1 1.1
Strongly agree 2 2.2
Total 91 100.0
Source: Research findings, November 2018
 43

Generally, cooperatives are founded to satisfy the needs of their members. They also created

not only to serve the interests of members, but also the society at large. When the cooperative

fails to satisfy the needs of members, members lose interests and this ends to total

disengagement. The results in the table 4 show that 57.1% of respondents confirmed that

cooperative leadership (Board and other committee) serve fairly the interests of cooperative

members. 29% of respondents said that cooperative leadership serve well the interests of

cooperative members, while only 1% confirmed that cooperative leadership outstandingly

serves the common interests of members.

The researcher assumes that the ideal is for cooperative leadership to excellently work and

serve for the interest of the cooperative and its members. Having said that, it is clear that

there are loopholes in the way cooperative leadership works and serves common interests of

cooperative members.

4.3.2 Cooperative managerial - related factors

The managing cooperative is instrumental in making them succeed or fail. Strong financial

management, capacities in marketing and business planning are outcomes of good

management of cooperatives . In broadcasted interview on Radio Rwanda and RTV on 13th

December 2018, the Director General of Rwanda Cooperative Agency revealed that 1.9

billion was embezzled in credit and savings cooperatives, while 1.3 billion was embezzled in

other types of cooperatives 1 . This was due to cooperative managerial related challenges,

including lack of managerial skills, robbery and fraud, misuse and abuse of cooperatives

funds and properties to mention, but a few.

11
RCA. Report on cooperatives. Documentary broadcasted on Radio Rwanda 13th December 2018
 44

This stuudy evaluatted the mannagerial facctors which might have affected the perform
mance of

cooperaatives.

Figure 9: Who maanages the cooperativve

Source: Research findings, November 20018

The Laaw governinng cooperaatives in itss Article 48 gives preecision on the structu
ure of a

cooperaative. It stippulates that a Cooperatiive Organizzation shall have the foollowing Org
gans: (i)

The Geeneral Assembly; (2) The

T Board of Directorrs; (iii) Thee Supervisory Committtee; and

(iv) othher cooperattive Organization’s com

mmittees. Article 63 of the samee Law says that the

Board of
o Directorss shall be thhe managem
ment authority of the Coooperative O
Organizatio
on which

implem
ments the deecisions andd directives adopted by
y the Generral Assembbly. In otherr words,

other orrgans or com

mmittees suubordinate and
a supplem
ment the Booard of Direectors, inclu
uding the

elected committee (s). Howevver, accordinng to findin

ngs in Figurre 9, responddents at 68..1% said

that theeir cooperattives are managed

m by elected co
ommittees other
o than B
Board of directors,
d

26.4% said that thheir cooperaatives are managed

m by recruited team of mannagers who
o are not

necessaarily membeers of coopeeratives.

 45

This is an issue ass the organ (Board of directors) which

w by-Laaw is suppoosed to man
nage the

affairs of cooperaatives intervvenes rarely. Commen

nting on thhis situationn, one inteerviewee

narratedd “memberss of the boaard are peoople who offten are bussy. Some w
work for theemselves

and othhers are em

mployees in private or public institutions. Beecause of thheir tight and
a busy

schedulle they do not

n find enoough time too follow an
nd monitor the
t day to dday manageement of

the coooperative. This

T is whyy in some cooperative
c e the mistakkes, mismaanagement done
d by

hired managers
m aree discovered very late.. Lack or poor
p involvement of booard of direectors in

the mannagement off cooperativves causes poor

p perform
mance and failure
f of soome cooperaatives.

Figure 10: Extentt to which transaction

n costs are minimized

Source: Research findings, November 20018

According to figuure 10, resppondents (559.3%) con

nfirmed thaat transactioon costs arre fairly
minimizzed. Another portion of 20.9% said
s that traansaction coosts are poorly minim
mized. In
other words,
w the reespondents don’t apprreciate posittively the way
w money is managed
d. There
are som
mehow, som
mewhere the cases of misuse
m use of coopperative monney. The researcher
or abu
assumes that wheen the trannsaction coosts and operation
o coosts are not minimizzed, the
cooperaative will noot generate profits,
p mem
mbers will not
n get dividdends or boonus, and fin
nally the
 46

cooperaative will coollapse. On this point, the intervieewee said “We

“ have exxperienced and still
experience in somee cooperatiive, the misuse of coop
perative mooney. Somee managers manage
cooperaative moneyy as they want; the value for money
m prinnciple (efficciency) is missing.
Sometim
mes, they become com
mmissioners when it co
omes to buyy equipment or materiials, and
even in offering tennders”.

Figure 11: Existen

nce of well--done busin
ness planniing and finaancial man
nagement

Source: Research findings, November

N 20018

Businesss planning and financcial manageement play a crucial part

p in the well-functio
oning of

cooperaatives.

Findinggs in Figurre 11 show

w that 66.7%
% of respo
ondents saidd that busiiness plann
ning and
financiaal managem
ment are faiirly done, 15.6%
1 conffirmed that it is poorlyy done, wh
hile only
1.1% saaid that it is well donne. When asked
a to justify their answer
a to tthe question, some
revealedd that they are membeers of cooperatives forr more thann 5 years, bbut they did
d not get
much from
fr them. One
O said “W
We are toldd to create cooperative
c e, but only m
managers can
c gain
much annd some beecome rich because
b of cooperative
c e. The statuss of ordinary
ry members,, like me
remainss the same”.
 47

Figure 12: Existen

nce of effecctive human
n resource managemeent

Source: Research findings, November

N 20018

The ressults in Figgure 12 show that big majority of responddents (78%

%) said thatt human
resource is fairly managed,
m 111% said thaat human ressource is pooorly managged, while only
o 2%
confirm
med that hum
man resourcce is very well
w manageed. From these data, it can be notiiced that
human resource management
m t in cooperaatives needs to be impproved. Durring interviiew, one
informaant said “Because of limited
l finaancial capacity of coopperatives, tthey pay veery little
money as salaries, and thaat little mooney are offten paid irregularly.. Again, th
he work
conditioons are meddiocre for many
m cooperratives. Som
me cooperattives lack addequate offfices and
adequate equipmennt”.
 48

Figure 13: Markeeting capaccity of coop

perative

Source: Research findings, November

N 20018

As manny cooperatiives producce and supplly goods an

nd services, they must hhave capaciities and
strategies to markeet their products. The necessity of
o marketingg is explainned by the fact
f that
cooperaatives are opperating in very
v compeetitive envirronment. Thherefore, faiiling to market their
productts leads to low sales and low profits. Th
he results in Figure 113 show th
hat 78%
appreciate at averaage level the capacity of
o cooperatives to marrket their prroducts, 16.5% said
that thee capacity off cooperativves to do market is at low level, while
w only 5.5% confirm
med that
the marrketing capaacity of coooperatives iss at high lev
vel. From thhe above ressults, the researcher
notes thhat cooperaatives in Gaasabo districct need to improve
i thee extent at which they
y market
their services and products.
p T
They need too invest in marketing; otherwise ffailing to market
m in
current very comppetitive buusiness enviironment may
m lead too low sales, profits and
a low
perform
mance. Onee intervieweee revealed “Because of
o insufficieent skills in marketing and low
financiaal capacityy of cooperratives, maarketing is not amonng the firstt options of
o many
cooperaatives”
 49

Figure 14: Existen

nce of perfoormance coontract system

Source: Research findings, November

N 20018

Signingg the perforrmance conntract is onne of the sttrategies too hold the bboard of directors,
d

memberrs of differeent committtees and othher staff acccountable, and to makke them resp
ponsible

and coommitted too their responsibilities. The sig

gning of peerformance contract between
b

cooperaative leadership and coooperative members

m sh
hould be donne in generral assembly
y. By so

doing, every mem

mber of maanagement committee will feel accountable and resp
ponsible.

Howeveer, the resuults in Figuure 14 show

w that predo
ominant maajority of 997.8% said that the

manageerial system
m of signing performancce contract does not exxist in coopeeratives. On
nly 1.1%

confirm
med that the system exists and is done
d every year,
y and 1.1% said thaat it exists and
a done

every six
s months (twice a yeear). This lack of maanagerial syystem of siigning perfo
ormance

contractt is a seriouus weaknesss and challeenge in coo

operatives as it affects the perform
mance of

cooperaatives.
 50

Figure 15: Existen

nce of finan
ncial controol committee

Source: Research findings, November

N 20018

The finndings in figure 15 shoow that 98.9% revealeed that coopperatives doo not have financial
f
control committee or an audittor. One off intervieweees said “Hiiring an audditor is diffficult for
some coooperatives as they cannnot pay forr him or herr regularly. Most of thee time, the members
m
appointt some of thhem to contrrol the trannsactions an
nd finance of
o cooperattive. In man
ny cases,
those appointed
ap m
members aree not skilleed to do fin
nancial control. This ccreates leakkages in
financiaal control and affects thhe performaance of coop
perative”.

Figure 16: Accoun

ntability in
n case of miismanagem
ment
 51

Source: Research findings, November 20018

a embezzlement in thhe cooperattives, those accused

In orderr to discourrage mismannagement and

of mism
managementt and embezzzlement off cooperativ m be punnished. Punishments
ve’ money must

can be imprisonmeent and payying backthee embezzled

d money. However,
H the findings in
i figure

w that 35..2% of respondents revealed

15 show r thaat those who
w embezzzle, misapp
propriate

cooperaative’ moneey are not identified. In other words,

w they are not purrsued. Thiss creates

impunitty and leads the coopeerative to paartial or tottal failure. Another

A 34..1% of resp
pondents

revealedd that thosee accused of

o stealing or mismanaage cooperaative’ moneey is only expelled
e

from thhe cooperativve without necessarily paying bacck embezzleed money. Expulsion from
f the

cooperaative withouut paying baack (rectificcation) is in

ncomplete saanction. Beecause of thaat, some

dishoneest memberrs in leadership steal and

a go with
hout any prroblem. Onnly 16.5% said
s that

those suuspected of embezzlem

ment, misapppropriation aretaken to justice (couurts).

From thhe researcheer perspective, the aforrementioned

d sanctions or measures do not disscourage

misbehaaviors and malpractice

m es in cooperratives, becaause they arre incompleete and insig
gnificant
 52

sanctionns which caan dissuadee misbehaviors. Thereffore, there iss a big gap in pursuing
g and in

dissuadding misbehhaviors in coooperatives.. This justiffies why thee cases of em

mbezzlement never

stop in cooperativees, but keep increasing each year.

4.3.3 Governmeent involvem

ment and itts effects on
n cooperatiive perform
mance

Generallly, the govvernment has

h the rolee to put in place a coonducive ennvironment for the

cooperaatives to be created andd to developp. Howeverr, governmeent excessivve interventiions and

bad inteentioned intterventions in the operrations of cooperatives

c s may hampper their au
utonomy

and perrformance.

Figure 17: Extentt to which government officials’ involvemen

nt affects cooperativee
mance
perform

Source: Research findings, November 20018

Cooperatives operrate in socioo-political environmen

e nt and leadeership from
m local gov
vernment
(sector, district) to central government
g t (RCA and MINICO
OM) interveening to asssist the
me, authorities interven
cooperaatives. Most of the tim ne to registeer cooperattives and to
o deliver
legal reegistration. Also,
A local authorities may
m interveene to help the memberrs of cooperrative to
 53

settle diisputes if anny. They maay intervenee also to mo

onitor the fuunctioning oof cooperatives etc.
In all thhese interveentions, thee authoritiess must operrate for the interests aand develop
pment of
cooperaatives. How
wever, the results
r in figgure 17 rev
vealed that 26.4%
2 of reespondents strongly
agreed and agreed that governnment authoorities’ inteervention inn cooperativves (especially local
authoritties) aims at serving thheir personaal interests rather
r than cooperative
c e members ‘interest.
One off the respoondent com
mmented “SSome of lo
ocal authorities are corrupt an
nd their
intervenntions aim at
a serving thheir interestts instead off cooperativve memberss’ interest. In cases
of dispuutes, they caan protect thhose who arre accused if they havee corrupted them. Somee are not
honest and fair in resolving conflicts whhich may arise
a in the cooperativves. This aff
ffects the
perform
mance”.

Majoritty of 67% were

w neutrall to this queestion. In otther words, they were afraid to talk about

authoritties. Only small proportion off 6.6% disagreed thaat authorityy’ interventtions in

cooperaative aim att serving thheir interestts rather thaan cooperattive membeers’ interestts. From

the datta, some respondents

r s were nott satisfied with the authoritiess’ interventtions in

cooperaatives. Therrefore, someething mustt change in the ways thhe authoritiies, especially local

authoritties intervenne in cooperratives

Figure 18: Extentt to which governmen

g t involvement hampers the autoonomy of

cooperaatives
 54

Source: Research findings, November 20018

Excessiive governm
ment’ intervvention in the
t function
ning of coooperatives m
may jeopardize the
autonom
my and poower of cooperatives
c s in decision-makingg. The ressults in fig
gure 18
demonsstrate that majority (85.7%)
( aggreed that excessive government interven
ntion in
cooperaative affectts the autoonomy of decision-m
making andd finally oon the coo
operative
perform
mance. In thhis context,, an example of coopeeratives of farmers in Northern Province
P
who coomplained about locaal authoritiees’ interven
ntions to determine
d tthe prices of Irish
Potatoees was givenn as an illusstration casee study. On
ne of interviiewees saidd “I think yo
ou heard
it becauuse it was broadcasted on radioss about how
w authoritiies’ intervenntions in fixxing the
modalitties of sellinng Irish Potatoes yieldd and the prrices affecteed the farmers. The yiield was
damageed in the field and farm
mers have loost”

Figure 19: Govern

nment invoolvement in
n providing
g a politicall, legal grou
und for

cooperaative to flou
urish

Source: Research findings, November

N 20018

None can look down

d on thhe significant part pllayed by Cooperative
C es in devellopment.

Therefoore, the govvernment must

m providde a political and legaal conducivve environm
ment for
 55

cooperaative to flouurish. The question

q waas asked to the
t responddents to apppreciate the political

and legal ground annd tell us whether

w this ground help
ps the cooperatives to fflourish or not.
n

The ressults in figurre 19 show that predom

minant majo
ority of 96.77% appreciaate the polittical and
legal grround in plaace. The Laaw governinng cooperattives was esstablished aand the gov
vernment
created an agencyy (Rwandaa Cooperatiive Agency
y (RCA) to
t follow tthe functio
oning of
cooperaatives and to develop them. Onlly 3.3% diid not apprreciate the political an
nd legal
environnment in plaace and how
w it assists cooperativ
ves to flouriish. When aasked to jusstify the
answer,, one responndent said that “Laws and regula
ations are there,
t but thheir enforceement is
still a challenge.
c People in cooperativee are breakking those laws, but nnothing is done to
pursue them”. Thhis is somee memberss manage cooperative
c es as they want or as
a their
propertties”.

Figure 20: Exten

nt to which
h governmeent involveement facillitates coop
peratives to easily

access to
t resourcees and markets

Source: Research findings, November

N 20018

Cooperatives prodduce goods and servicees. Thereforre, they shoould be faciilitated and assisted
to havee easy acceess to the markets.
m Thhey should be assistedd in accessiing to cheaaper low
 56

materials if it is a cooperative of production. In addition, cooperatives should be assisted in

accessing to affordable and cheap loans. The figure 20 indicates that 92.3% of respondents
confirm that the government’ intervention in facilitating cooperatives to access to resources
and markets is insufficient. Only 6.6% appreciate the government intervention in facilitating
cooperatives to have easy access to resources and markets. On this point, one of the
interviewee said “Today, cooperatives are struggling and challenged by the high interest rate
of bank loans. We have complained, but government has done nothing. Again, the local
market is very small and sometimes cooperatives produce and the markets become scarce”.
Another issue raised is “S mark”. Many cooperatives in production sector are struggling to
get “S mark) provided by Rwanda Standard Board. To this end, another problem raised is”
why is the Government imposing so many new regulations like taximeters on us without prior
consultations”.

From the researcher perspective, the government intervention in assisting cooperatives to

build their capacities is still at low level. More efforts are needed in this angle.

Last but not least, the respondents were asked to give their opinions on what must be done to

ensure that cooperatives function properly and maximize their performance. The figure 25

below presents some of their suggestions per importance order.

 57

Figure 21: Respon

ndents’ sugggestions too increase cooperativee performance

Respon
ndents'Sugggestions to increase cooperrative
0 5 10 15 20 25 30 35 40 45
perform
mance
Reegular capacitty building thrrough traininggs of… 44

Eaasy access to affordable loaans 20

Enhanced monitoring off cooperativess by… 15

Inccrease the num

mber of perso
onnel in charge of… 11

Easy access to markkets 10

Regular field visits off cooperativess by… 10

Signing performance
p c
contract betw
ween… 8

Strengtheen internal fin

nancial contro
ol of… 7

Regularly field
d-learning visiits (learning frrom… 6

Increase mem
mbers’ involvem
ment in decision-… 4

duce levies an
Red nd taxes asked
d to cooperatives 2

Increase the
e quality of go
oods and services… 2

Facilitate the registration and

d accreditation of… 2

Source: Research findings, November

N 20018

According to the data presennted in figuure 21, the respondentts suggest firstly the capacity
c

buildingg of cooperratives, espeecially reguular training

g of cooperrative leaderrship and members
m

on variious domaiins related to cooperrative manaagement. Secondarily,

S , they sugg
gest the

facilitattions for eaasy access to affordabble and cheeap bank looans, and thhirdly they suggest

enhanciing the reguular monitorring of coopperatives by

y authoritiess (all levels)) in charge.
 58

4.4 Discussion of the findings

The relevance of cooperatives in development is well known worldwide. However, this role

is significant if cooperatives are functioning and performing well. Non-performing

cooperatives affect not only their existence and sustainability, but also the socio-economic

development of the country. Though majority of cooperatives in Gasabo district operate and

perform well, but there are others which poorly perform and end up to partial or total failure.

The factors which may hinder the performance of cooperatives in Gasabo need to be

investigated and this study is undertaken for this endeavor. The governance – related factors,

managerial – related factors and government’ interventions – related factors were assessed.

First of all, the study showed a challenge about the education level of members of

cooperatives. The findings showed that big majority of respondents has primary education

(56%), while25.3% have secondary education and 17.6% did not complete primary school.

Overall, it was found that the level of education of respondents is low and this might be one

of the factors causing poor management which results to poor performance of cooperatives in

Gasabo district. This does not contradict what Birchall (2011) says when he argues that

cooperative failure takes place because of uneducated members rather than demotivated

members.

The awareness of cooperative members on the vision and mission of their cooperatives was

one of governance –related factors analyzed. It was found that majority of about 58.3% have

poor knowledge or do not know at all the vision and mission of their cooperatives. This lack

or low level of awareness on the vision and mission of their cooperatives may be one of the

causes of members’ disengagement towards their cooperatives which leads to poor

performance. In the same perspective,Chaddad & Cook (2004) stated that a well-informed
 59

governance structure and clear vision and mission of cooperative are important for the

success of a cooperative.

Lack of awareness on the vision and mission of cooperative by members may lead to

disengagement of cooperative members, while knowledge on the vision and mission of

cooperative leads to active engagement.

Another Governance – related factor analyzed is the level of participation of cooperative

members in decision-making. The findings showed that big majority of 73.6% confirmed that

members of cooperatives are sometimes consulted by the Board or other committees before

taking decisions that concern them. Another non-negligible percentage of 16.5% said that

they are rarely consulted or not consulted at all. From these figures, the researcher realized

that there is a governance gap in members’ participation in decision-making and that might

have led or leading to poor performance of cooperatives in Gasabo district. In supporting,

Nkhoma (2011), argues thatfailing to engage cooperative members in making decisions that

affect the lives of their respective cooperatives or doing it sometimes may lead to members’

disinterest and demotivation.

The existence of guiding principles and the level of adherence to those principles by all

members were assessed under governance-related factors. It was found that only 58.3% think

that those principles exist and are respected by all members. This means that the remaining

percentage of 42.7% observes some loopholes in the establishment of those guiding

principles and in their implementation. In other words, to ensure good governance of any co-

operative, guiding principles including conditions to become a cooperative member,

conditions to be expulsed from a cooperative must be put in place, made known and

respected by every member of a cooperative.

 60

The cooperation in tiers of cooperative was analyzed. It was analyzed whether there is two

ways communication between leadership of cooperatives and ordinary members, whether

there is mutual trust and mutual respect. The findings showed that 44% of respondents

confirmed that the relationship is fair, 24.2% confirmed that the relationship is good and 22%

confirmed that the relationship is poor. None confirmed that the relationship is excellent.

These figures show clearly the gap in relationship, communication and cooperation that

prevail in cooperatives. However, Mardiasmo, Barnes, & Sakurai (2001), argue that good

cooperation between cooperative leaders and members is one of determinant factors for the

performance of a cooperative. Relationships founded on mutual trust, respect, transparency

and two ways communication help all members to work together for the development of their

cooperative.

The managerial – related factors were analyzed and the key findingswere:The findings

showed that 68.1% said that their cooperatives are managed by elected committees other than

Board of directors, 26.4% said that their cooperatives are managed by recruited team of

managers who are not necessarily members of cooperatives.

Cooperative performance requires good management of financial resources where transaction

costs must be minimized as much as possible. When there is misuse of the resources, the

cooperative cannot prosper. The findings showed that 59.3% of respondents confirmed that

transaction costs are fairly minimized. Another portion of 20.9% said that transaction costs

are poorly minimized. In other words, the respondents do not appreciate positively the way

money is managed. There are somehow, somewhere the cases of misuse or abuse of

cooperative money. Costs efficiency is critical aspect for cooperative performance as was

confirmed by Nilsson (1999) who also said that chosen structure of a cooperative needs to

minimize transaction costs and maximize efficiency.

 61

The performance of cooperative requires good management of human resources where staff

must be fairly recruited, remunerated and developed. However, the findings showed

weaknesses in management of human resources by cooperatives. It was shown that big

majority of respondents (78%) said that human resource is fairly managed, 11% said that

human resource is poorly managed, while only 2% confirmed that human resource is very

well managed. The deficiencies in HR management affect the performance of cooperatives in

Gasabo district. In this same regard, ARNALL (2016) argues that the success of an

organization depends largely on how well human resources are managed. Inadequate human

resource management leads to demotivation and to poor performance.

Another managerial factor that affects negatively the performance of cooperatives is the way

managers are held accountable in case of embezzlement of cooperative’ money. The findings

showedthat 35.2% of respondents revealed that those who embezzle misappropriate

cooperative’ money are not identified. Another 34.1% of respondents revealed that those

accused of stealing or mismanage cooperative’ money is only expelled from the cooperative

without necessarily paying back embezzled money. Only 16.5% said that those suspected of

embezzlement, misappropriation aretaken to justice (courts).

The government intervention – related factors were analyzed and the retained important

factors are: 24.6% of respondents revealed that government officials’ intervention in

cooperative management (especially local authorities) aims at serving their personal interests

rather than cooperative members ‘interest. Also, big majority (85.7%) confirmed that

repetitive and informal government interventions jeopardize the autonomy of cooperatives.

However, Nilsson (1999)argues that members of cooperatives need autonomy and

independency when deciding the activities, action plan and the future of their cooperatives.
 62

Last but not least, the government’ intervention in facilitating cooperatives was assessed and

92.3% of respondents do not appreciate government’ intervention in facilitating the

cooperatives to have access to resources and markets. Lack or insufficient government’

intervention, especially local governments in facilitating cooperatives to access to finances

and to the markets affect their performance. However, Hussain (2014) argues that as

cooperatives contribute to the country development in producing goods and services they

should be facilitated and assisted to have easy access to finance and to the markets.

Summary

Chapter four discussed the factors affecting the performance of cooperatives in Gasabo

district. Ninety-one (91) respondents from 7 selected cooperatives participated in the survey.

The factors affecting the performance of cooperatives were subdivided into three categories:

cooperative governance related factors; cooperative managerial related factors; and

government involvement in operations of cooperative related factors. The results showed that

low level of education of members of cooperatives is one of hindrances to the performance of

cooperatives. Overall, it was shown that cooperatives are facing governance weaknesses that

effect performance, namely, low level of awareness on vision and mission of cooperative by

members (Figure 6), members who are not consulted before taking decisions that concern

them (figure 8); guiding principles which are not clearly elaborated and respected by all

members, to mention but a few. The managerial related factors mostly cited are: lack of

business plan and adequate financial management system, weak financial control (weak audit

system) and weak human resource management. In addition, it was shown that some

government interventions, especially local authorities in the functioning of cooperatives

jeopardize their autonomy of decision making and there are weaknesses in assisting the
 63

cooperatives to build their capacity by the government, especially facilitations to have access

to affordable bank loans and easy access to external markets.

 64

CHAPTER V: GENERAL CONCLUSION AND RECOMMENDATIONS

5.1. Introduction

The performance of cooperatives, especially in Sub-Saharan Africa has been affected by a

number of problems. Some of the problems identified were related to: (i) managerial

capacities;(ii) unclear incentives for starting cooperatives; (iii) poor governance; (iv) lack of

capital resources; (v) disloyalty of members due to ignorance; (vi) corruption and huge lack

of management by officials; (vii)favoritism in recruiting and firing employees; (viii) interest

conflicts; (ix) disputes; (x) Investing without seeking consulting members; to mention but a

few.

Cooperatives in Rwanda did not have a good start. The government of Rwanda (GoR)through

RCA investedsignificant resourcesin cooperatives, but many of them went bankrupt simply

due to the fact they had no well thought out plans.When the colonial era came to an end, the

new regime led by Rwandans themselves made use of cooperatives as tools for executing its

policies and plans, hence turning out to be an instrument for politicians. In addition, the

government and its partners started attitudes of dependency to the extent that cooperatives

and associations founded would benefit from their support. As a result, lots of members fell

into the trap of taking a cooperative as a gateway to different kinds of support of benefactors

rather than viewing it as an organ that can produce its own resources and make

profit.Consequently, poor performances were observed which often resulted into partial or

total failure.

This study was undertaken with general objective to investigate and determine the factors that

are affecting the performance of cooperatives in Gasabo District. Specifically, this study

aimed at: (i) Determine the cooperative governance related factors which hinder the
 65

performance of cooperatives in Gasabo District; (ii)Assess the cooperative managerial related

factors which hinder the performance of cooperatives in Gasabo District; and (iii) Determine

government intervention related factors which weaken the performance of cooperatives in

Gasabo district.

This study was conducted in Remera sector of Gasabo District in the City of Kigali, Republic

of Rwanda. This district is not chosen by happenstance but because it is one of the Districts

situated in the City of Kigali whereby different types of cooperatives in different domains:

transport, agriculture, trade, construction, savings and credit are found. Also, because

members are urban people, they should have a certain level of understanding on the

functioning of cooperatives and factors which may affect negatively the performance of

cooperatives. Last but not least, the choice was motivated by the fact that the researcher heard

for many times via radio and TV broadcastings,members of cooperatives’ criticisms about

poor performance of cooperatives in Gasabo district. Specifically, Remera sector was

selected because it has many cooperatives than other sectors

To achieve the above objectives, a methodology was used. This study was mainly descriptive,

but also critical analysis research design. Descriptive research is designed to provide a picture

of a situation as it happens, while critical analysis research design involves deeper analytic

thinking to evaluate something. This study adopts descriptive design to provide a picture of

the situation and explain current operations of cooperatives and finally make judgment. The

descriptive design assisted in determining the weaknesses of cooperatives in Gasabo district,

and how they affect their performance.

The targeted population was members from registered cooperatives in Remera sector of

Gasabo district and number of those cooperatives was sixty three (63). From sixty three(63)

cooperatives, seven (7) cooperatives operating in different domains were

 66

judgmentallyselected. Members from seven cooperatives who participated in the survey were

randomly selected, but it was ensured that ordinary members and members of committees

(leadership) participate in the survey. The sample size for the study was 91 respondents.

Furthermore, 5 key informants were purposively selected for interviews.

To collect data, triangulation of data collection techniques was used, namely documentary,

questionnaire (Survey) and interviews. Prime data was gathered through questionnaires and

interviews, whereas secondary data were gathered through desk review or documentary. As

to analyzing information gathered, the Statistical Package of Social Sciences (SPSS) and

Microsoft Excel were utilized. They assisted in calculating the percentages, frequencies and

to generate tables, pie charts and graphs.

5.2 Conclusion on the findings

The first study goal was to “Determine the cooperative governance factors that affect

negatively the performance of cooperatives in Gasabo District”. This objective was

achieved through the following major findings:

First all, the data in table 1 showed that big majority of respondents has primary education

(56%) and17.6% did not complete primary school. In today’s context, this level of education

of respondents is considered low and this might be one of the factors causing poor

management of cooperatives in Remera sector in Gasabo district as members have not

sufficient capacities to actively engage in managing cooperatives.

Lack of awareness on the mission and vision of their cooperatives was found as an obstacle.

It was found in Figure 2 that majority of about 58.3% have poor knowledge or do not know at

all the vision and mission of their cooperatives. You cannot actively engage in something you
 67

are not aware of. As a member of cooperative you cannot hold managers accountable of

ignoring the mission and vision of cooperative if you are not aware of them.

Members of cooperative must be engaged always in decision-making. Failing to engage

cooperative members in the decision-making or doing it sometimes may lead to members’

disinterest and demotivation and this affects the performance of cooperative. However, figure

4 showed that majority of 73.6% are sometimes consulted by the leadership before taking

decisions that concern them.

Any cooperative must have guiding principles and every member must be abided by those

principles. However, the findings in the table 2 showed that 58.3% of respondents confirmed

that the guiding principles exist, but they are fairly made and respected. This means that 41,

7% observe some loopholes in respecting the guiding principles by all members.The findings

in table 3 showed the status of relationships between the board and cooperative members.

Normally, the relationship between members must be characterized by mutual trust and

respect and open communication. However, 44% of respondents confirmed that the

relationship is fair, and 22% confirmed that the relationship is poor.This is a gap in the

relationship and that might be one of the causes of poor performances of cooperatives in

Gasabo district.

Another factor that affects the performance of cooperatives is unfair elections. The findings

showed that majority of respondents (55%) confirmed that elections of committees are not

fair or transparent. Only 3% confirmed that the elections are very fair. Unfair and non-

transparent elections have negative effects and they are sources of disputes in cooperatives.

The second research goal was to “Assess the cooperative managerial factors which affect

negatively the performance of cooperatives in Gasabo District”. The following were found
 68

as managerial – related factors that affect negatively the performance of cooperatives in

Gasabo district. The findings in Figure 9 showed that their cooperatives are managed by

elected committees other than Board of directors as it was confirmed by 68.1% of

respondents, 26.4% said that their cooperatives are managed by recruited team of managers

who are not necessarily members of cooperatives.This is an issue as the organ (Board of

directors) which by-Law is supposed to manage the affairs of cooperatives intervenes rarely

and that affects the performance of cooperatives.

Fifty-nine (59.3%) of respondents confirmed in Figure 10, that transaction costs are fairly

minimized, while 20.9% said that transaction costs are poorly minimized. In other words,

majority of respondents do not appreciate positively the way the resources of the

cooperatives, especially how money is managed. They find cases of misuse and

misappropriation of cooperative money and property. This misuse and misappropriation of

cooperative’ resources affect negatively the performance of cooperatives

The findings in Figure 12 show that majority of respondents (78%) said that human resource

is fairly managed, 11% said that human resource is poorly managed, while only 2%

confirmed that human resource is very well managed. From these data, it can be noticed that

human resource management in cooperatives needs to be improved. Inadequate human

resource management is due to limited financial capacity of cooperatives whereby some don’t

hire qualified staff, staff under-paid and poor working conditions (lack of offices and office

equipment). All of these affect negatively cooperative performance.

The findings showed that cooperatives don’t have adequate marketing strategies. In Figure

13, 78% appreciate at average level the capacity of cooperatives to market their products and

services, while only 5.5% confirmed that the marketing capacity of cooperatives is at high

level. Low capacity of marketing is due lack of skills in marketing and low financial capacity
 69

to pay for advertisement. Performance contract system enhances responsiveness and

accountability. However, this system is lacking in cooperatives. Predominant majority of

97.8% said that the managerial system of signing performance contract does not exist in

cooperatives. This gap leads to laziness, irresponsibility, corruption etc. which at the end of

the day results into poor performance of cooperatives.

Findings in figure 15revealed that cooperatives do not have financial control committee or an

auditor as it was confirmed by98.9% of respondents. Financial control is done by internal

committee who most of the times doesn’t have knowledge and skills to discover the

malpractices in financial transactions. Lastly, the findings showed weaknesses in holding

accountable the managers who embezzlecooperative’ money. The findings in figure 16

revealed that those who steal cooperative money are not identified as it was confirmed by

35.2% of respondents. In other words, they are not pursued. Another 34.1% of respondents

revealed that those accused of stealing or mismanage cooperative money are only expelled

from the cooperative without necessarily paying back embezzled money. It is clear that this

impunity or half-done punishment affects the performance of cooperatives.

The third study goal was to “Determine government intervention related factors which

weaken the performance of cooperatives in Gasabo district”. This objective was attained

through the following major findings: The results in figure 18 demonstrated that excessive

government intervention in cooperative management affects the autonomy of decision-

making and finally on the cooperative performance. This was confirmed by 85.7% of

respondents. The findings in figure 19 showed that 92.3% of respondents do not appreciate

the government intervention in facilitating the access to resources (affordable loans) and

markets. This deficiency affects the performance of cooperatives.

 70

5.3 Recommendations

This study indicated that members of cooperatives have low level of education, and thus

limited capacities to engage actively in cooperative functioning. In order to address this

challenge, the study recommends the government of Rwanda through RCA to regularly build

the capacities of cooperative members through trainings.

Research results disclosed that cooperative members have low level of awareness on the

mission and vision of their cooperatives. As this lack of information limits members’

engagements, the study recommends the leadership of cooperatives (Boards) to explain to

their members the mission and vision of their cooperatives.They must also explain to their

member the Law governing cooperatives, their obligations and rights as members of

cooperatives.

This study indicated that some cooperatives do not have guiding principles and those that

have them ignore them. In other words, not all members are abided by established guiding

principles. In order to address this challenge, the study recommends the district through the

person in charge of cooperatives in the sector to help the cooperatives to establish the guiding

principles. The study recommends also the RCA to do regular follow-ups and ensure smooth

functioning of cooperatives.

The study indicated that elections of committees in cooperatives are not free and fair. This

affects to some extent the performance of cooperatives. In this regard, the study recommends

the sector through the person in charge of cooperatives to assist the cooperatives to organize

free and fair elections of committees and ensure that committees are replaced in accordance

with the law. This requires the district to increase the number of personal in charge of
 71

cooperatives at sector level, because one person (Agronomist) is not capable of handling all

problems in cooperatives.

The study findings indicated gaps in human resource management in cooperatives whereby

cooperatives do not have required number of staff and do not have qualified staff. This leads

to mismanagement, inconsistent strategies (for instance, investment and marketing strategies,

etc.). In order to address this challenge, the study recommends the government of Rwanda

through RCA to facilitate the cooperatives to recruit and maintain qualified personnel. This

recommendation goes also to the cooperative leadership who must always strive to hire

competent and qualified supporting staff without sentiments.

The findings of the study showed that performance contract system does not exist in surveyed

cooperatives. This lack may create laziness and irresponsibility. Therefore, the study

recommends the government of Rwanda through RCA to introduce the performance contract

system in cooperatives as it might enhance the level of accountability and responsiveness in

cooperatives. These performance contracts must be signed between the cooperative

leadership and the sector authority or if possible with district authority.

This study indicated weaknessin recovering misused or embezzled money of cooperatives.

This affects cooperative performance. As to this challenge, the study recommends the

government of Rwanda through RIB and RCA to help cooperatives to conduct investigations

in order to identify the responsible persons and take them to count. This goes to MINIJUST

that must help cooperatives to recover embezzled or stolen money.

Last but not least, the findings indicated that government’ interventions in helping the

cooperatives to easy access to the markets and to finances are not enough.Therefore, the

study recommends the government of Rwanda through MINICOM and MINECOFIN to

 72

assist cooperatives to have access to affordable and cheap bank loans and to have easy access

to markets, especially external markets.

5.4 Areas of further research

This study covered only 1 sector in one District of Gasabo and therefore quite limited in

generalizing the findings to all cooperatives in Rwanda. Therefore, it can be much better if it

is conducted at a much larger scale. There is also a need to conduct researches on the

following:

ƒ Accountability of cooperative leaders towards cooperative members.

ƒ Effectiveness of RCA interventions in promoting good governance and

efficient management in cooperatives;

ƒ To do a comparative study on the benefits of being in the cooperative or not.

 73

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APPENDIX 1: THE NUMBER OF COOPERATIVES IN GASABO DISTRICT PER

SCOPE OF WORK

Sector Scope of work Number of all Number of Number of

cooperatives cooperatives cooperative
with at least
5 years With less than 5
years
1.Bumbogo a) Production 14 08 06
b) commercial and consumer 04 00 04
c) Savings and credit 01 01 00
d) Services 04 01 03
e) Multipurpose 05 01 04
Total 28 11 17
2.Gatsata a) Production 14 07 07
b) commercial and consumer 03 00 03
c) Savings and credit 01 01 00
d) Services 06 04 02
e) Multipurpose 02 00 02
Total 26 12 14
3.Gikomero a) Production 17 06 11
b) commercial and consumer 01 00 01
c) Savings and credit 01 01 00
d) Services 01 01 00
e) Multipurpose 00 00 00
Total 20 8 12
4.Gisozi a) Production 13 08 05
b) commercial and consumer 08 02 06
c) Savings and credit 01 01 00
d) Services 10 03 07
e) Multipurpose 03 03 00
Total 35 17 18
5.Jabana a) Production 21 08 13
b) commercial and consumer 02 02 00
c) Savings and credit 01 01 00
d) Services 07 00 07
e) Multipurpose 03 01 02
Total 34 12 22
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6.Jali a) Production 06 01 05
b) Commercial and consumer 03 02 01
c) Savings and credit 01 01 00
d) Services 02 00 02
e) Multipurpose 00 00 00
Total 12 4 8
7.Kacyiru a) Production 23 12 11
b) Commercial and consumer 11 06 05
c) Savings and credit 01 01 00
d) Services 19 08 11
e) Multipurpose 00 00 00
Total 54 27 27
8.Kimihurura a) Production 09 03 06
b) Commercial and consumer 07 02 05
c) Savings and credit 01 01 00
d) Services 08 02 06
e) Multipurpose 01 00 01
Total 26 8 18
9.Kimironko a) Production 18 10 08
b) Commercial and consumer 09 02 07
c) Savings and credit 01 01 00
d) Services 19 06 13
e) Multipurpose 01 01 00
Total 48 20 28
10.Kinyinya a) Production 22 7 15
b) Commercial and consumer 10 3 07
c) Savings and credit 01 01 00
d) Services 14 04 10
e) Multipurpose 03 01 02
Total 50 16 34
11.Ndera a) Production 17 06 11
b) Commercial and consumer 07 01 06
c) Savings and credit 01 01 00
d) Services 12 03 09
e) Multipurpose 01 01 00
Total 38 12 26
12.Nduba a) Production 10 04 06
b) Commercial and consumer 02 00 02
c) Savings and credit 01 01 00
d) Services 06 01 05
e) Multipurpose 00 00 00
Total 19 6 13
13.Remera a) Production 27 12 15
b) Commercial and consumer 08 04 04
c) Savings and credit 01 01 00
d) Services 26 14 12
e) Multipurpose 01 01 00
Total 63 32 31
14.Rusororo a) Production 32 19 13
b) Commercial and consumer 03 03 00
c) Savings and credit 01 01 00
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d) Services 12 04 08
e) Multipurpose 03 01 02
Total 51 28 23
15.Rutunga a) Production 06 02 04
b) Commercial and consumer 02 00 02
c) Savings and credit 01 01 00
d) Services 00 00 00
e) Multipurpose 00 00 00
Total 9 3 6
Grand Total (all sectors) 513 216 297
Source: Gasabo district- Business development office, 2018

APPENDIX 2: QUESTIONNAIRE FOR RESPONDENTS (COOPERATIVEBOARD

MEMBERS AND COOPERATIVE ORDINARY MEMBERS).

Section 1: Demographic characteristics of respondents

1.1Age of the respondent:

a) )16-30 [ ]b) 31and above [ ]

1.2 Sex of the respondent:

a) Male [ ] b) Female [ ]

1.3 What is the highest level of education have you attained?

a) Primary [ ] b) Secondary [ ] c) Tertiary [ ] d) Any other

(specify)……………...……………..

1.4 What is the name of your cooperative?..........................................

1.5 How much time have you spent in this cooperative? (Give years)………………………

Section 2: How cooperative governance affects the performance of cooperatives

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2.1 How do you rate your knowledge about your cooperative vision?

a) Excellent [ ]b) Very good [ ]c) Good [ ]d) Fair [ ]e) Poor [ ]f) Very poor [ ]

g) Do not know at all [ ]

2.2 How often do you have cooperative meetings?

a) Annually [ ]b) Biannually [ ]c) Quarterly [ ]d) Monthly [ ]e) No meeting at all [ ]

f) Any other (specify)……………………..

2.3 How often do your cooperative leaders consult you before making important decisions?

a) Always [ ]b) Sometime [ ]c) Rarely [ ]d) Never [ ]

2.4 At which extent your suggestions, opinions are taken into consideration by

management team when taking decisions that concern you?

a) Always [ ] b) Sometime [ ] c) Rarely [ ] d) Never [ ]

2. 5. In the scale from 1 to 5 (where 1 means strongly disagree, 2 means disagree, 3 means

neutral, 4 means agree and 5 meansstrongly agree) please indicate the extent to which you

agree with the following statements reflecting how your cooperative guiding principles to

which every member is required to adhere to are made and respected.

Statements 1 2 3 4 5

They are excellently made and respected

They are very well made and respected

They are well made and respected

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They are fairly made and respected

They are poorly made and respected

They are none existent

2.6.In the scale from 1 to 5 (where 1means strongly disagree, 2 means disagree, 3 means

neutral, 4 means agree and 5 means strongly agree) please show the degree to which you

agree with the following statements reflecting the relationship between cooperative

members and cooperative leaders

Statement 1 2 3 4 5

The relationship is excellent

The relationship is very good

The relationship is good

The relationship is fair

The relationship is poor

The relationship is very poor

2. 7. How often does your cooperative hold elections of committees?

a) Annually [ ]b) Biannually [ ] c) Quarterly [ ]d) Monthly [ ] e) Never [ ]

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f) Any other (specify)……………………..

2.8. To what extent do you rate the fairness of those elections?

a) Very fair [ ]b) Fair [ ]c) Not fair [ ]

2.9. How often do you (as cooperative member) participate in trainings organized by your

cooperative?

a) Annually [ ]b) Biannually [ ]c) Quarterly [ ]d) Monthly [ ]e) Never [ ]f) Any other

(specify)……………………..

2.10. In the scale from 1 to 5 (where 1 means strongly disagree, 2 means disagree, 3 means

neutral, 4 means agree and 5 means strongly agree) kindly show the level at which you

agree with the following statements reflecting the extent to which your cooperative operates

and strives for members ‘interests and provides services tailored to members’ needs

Statement 1 2 3 4 5

The cooperative excellently strives for members

‘common interests and provides services tailored

to members’ needs

The cooperative very well strives for members

‘common interests and provides services tailored

to members’ needs

The cooperative well strives for members

‘common interests and provides services tailored

to members’ needs

The cooperative fairly strives for members

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‘common interests and provides services tailored

to members’ needs

The cooperative poorly strives for members

‘common interests and provides services tailored

to members’ needs

The cooperative very poorly strives for members

‘common interests and provides services tailored

to members’ needs

Section 3: How cooperative management affects the performance of cooperatives

3.1. Who manages your cooperative on behalf of others?

a) Elected committee [ ] b) Board of directors [ ] c) Hired management team [ ]

d) I don’t know [ ]e) Any other (specify)……………………………………

3.2. How do you rate the extent to which your cooperative minimizes transaction costs and

maximizes efficiency?

a) Excellent [ ]b) Very good [ ] c) Good [ ]d) Fair [ ]e) Poor [ ]f) Very poor [ ]

Explain why your response/answer is correct

…………………………………………………………………………………………………

…………………………………………………………………………………………………

…………

3.3. How do you rate your cooperative business planning and financial management?
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a) Excellent [ ] b) Very good [ ] c) Good [ ] d) Fair [ ] e) Poor [ ] f) Very poor [ ]

Explain why your response/answer is correct

…………………………………………………………………………………………………

…………………………………………………………………………………………………

…………………………………………………………………………………………………

……………….

3.4. How do you rate your cooperative human resource management, especially

recruitment?

a) Excellent [ ] b) Very good [ ] c) Good [ ] d) Fair [ ] e) Poor [ ] f) Very poor [ ]

Explain why your response/answer is correct

…………………………………………………………………………………………………

…………………………………………………………………………………………………

…………

3.5. How do you rate your cooperative marketing capacity?

a) Excellent [ ]b) Very good [ ]c) Good [ ]d) Fair [ ]e) Poor [ ]f) Very poor [ ]

3.6. How often do you sign the performance contract between cooperative managers and

cooperative members?

a) Annually [ ] b) Biannually [ ]c) Quarterly [ ] d) Monthly [ ]e) Never done [ ]

f) Any other (specify)……………………..

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3.7. How often do you evaluate the performance contract of cooperative managers and

cooperatives leaders?

a) Annually [ ]b) Biannually [ ]c) Quarterly [ ]d) Monthly [ ]e) Never done [ ]

f) Any other (specify)……………………..

3.8. Does your cooperative have financial control committee (internal auditing)?

a) Yes [ ] b) No [ ]

3.9. If yes, how do you rate your cooperative internal audit performance?

a) Excellent [ ]b) Very good [ ]c) Good [ ]d) Fair [ ]e) Poor [ ]f) Very poor [ ]

3.10. In the case of mismanagement or embezzlement of cooperative funds, which

actions are taken against the responsible persons?

a. They are sacked and asked to reimburse embezzled money [ ] b. They are only sacked

and they don’t necessarily repay the embezzled money [ ] c. They are taken into justice

(courts) [ ]d. They are not identified because no one cares [ ] e. Any other

(specify)……………………..

Section 4: How government involvement affects the performance of cooperatives

4.1.In the scale from 1 to 5 (where 1means strongly disagree, 2 means disagree, 3 means

neutral, 4 means agree and 5means strongly agree) kindly show the level at which you

agree with the following statements reflecting the extent to which government involvement

affects the performance of cooperative

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Statement 1 2 3 4 5

Government involvement serves interests of

politicians rather than cooperative members

4. 2. To what extent does government involvement hamper the autonomy of your

cooperative to make its own decisions?

a) Very strongly [ ]b) Strongly [ ]c) To some extent [ ]d) Never [ ]

4.3. How do you appreciate the government involvement in providing a political, legal and

administrative ground for your cooperative to flourish?

a) Highly appreciated [ ]b) Appreciated [ ]c) To some extent appreciated [ ]

d) Never appreciated [ ]

4.4. How do you appreciate the government involvement in providing access to resources

and new markets to your cooperative?

a) Highly appreciated [ ]b) Appreciated [ ]c) To some extent appreciated [ ]

d) Never appreciated [ ]

Section 5: Strategies and recommendations to improve the performance of cooperatives

5.1. What do you think should be done to improve the performance of cooperatives in

general?

…………………………………………………………………………………………………

…………………………………………………………………………………………………
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…………………………………………………………………………………………………

…………………………………………………………………………………………………

…………………………………………………………………………………………………

…………………………

Thank you very much!

APPENDIX 3: INTERVIEW GUIDE

1. How do you view or consider the development of Cooperatives in Remera Sector?

…………………………………………………………………………………………………

…………………………………………………………………………………………………

…………………………………………………………………………………………………

………………

2. What are the best practices from Remera Sector Cooperatives that can be shared with

others?

…………………………………………………………………………………………………

…………………………………………………………………………………………………

…………………………………………………………………………………………………

……………....

3. Which are the main factors that affect the performance of Cooperatives in Remera Sector?
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…………………………………………………………………………………………………

…………………………………………………………………………………………………

…………………………………………………………………………………………………

……………....

4.How do you appreciate the governance of cooperatives in Remera Sector in general?

…………………………………………………………………………………………………

…………………………………………………………………………………………………

…………………………………………………………………………………………………

5. How do you appreciate the management of cooperatives in Remera Sector in general?

…………………………………………………………………………………………………

…………………………………………………………………………………………………

…………………………………………………………………………………………………

………………

6. How do you appreciate government involvement in cooperatives of Remera Sector in

general?

…………………………………………………………………………………………………

…………………………………………………………………………………………………

…………………………………………………………………………………………………

………………

7. What do you think should be done to overcome challenges facing the cooperatives in

Remera Sector in order to maximize their performance?

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…………………………………………………………………………………………………

…………………………………………………………………………………………………

…………………………………………………………………………………………………

…………………………………………………………………………………………………

…………………………………………………………………………………………………

…………………………

Thank you for your cooperation!