Influence of Co-operative Characteristics on Financial Performance of Irish Potato Farmer Co-operatives in Northern and Western Province Rwanda

Abstract

Purpose - The purpose of this paper is to examine the influence of co-operative characteristics on the financial performance of Irish Potato Farmer Co-operatives (IPFCs) in Northern and Western Provinces, of Rwanda.
 Design/Methodology/Approach - The study employed a relational research design in cross-sectional research. A purposive sampling technique was used in selecting 32 IPFCs out of 64 observations that complied with audited financial reports for the period 2018 and 2019 were the primary data used for the research. Key Informants Interviews (KIIs), and Focus Group Discussions (FGDs) were employed for data collection. Panel regression analysis was used as it is suitable to deal with fixed effects (FE) or random effects (RE) error components presented in the model.
 Findings - The paper results showed that liquidity, leverage, the number of employees, the value of total assets and the value of share capital are significant factors that contribute to financial performance measured in terms of Return on Assets (ROA) and Return on Equity (ROE). The paper also revealed a limited financial capacity for most IPFCs in the study area, challenging their growth.
 Research Limitation: Legal, political factors, technological and cultural factors influencing the performance of farmer co-operatives were not considered in this paper.
 Practical Implications - The recommendations will mainly assist IPFCs in achieving desired financial performance and provision of expected services to members. IPFCs are recommended to mobilise their members to increase their shareholding, to raise capital for their co-operatives and thus improve performance levels.
 Social Implication: This paper generates facts to inform stakeholders such as policymakers and non-governmental organizations.
 Originality/Value - This paper took a holistic perspective to cover all the co-operative-specific characteristics in the performance evaluation.

Application of Universal Cooperative Principles in Agricultural Cooperatives: A Case Study from Nepal

“…Reviewing and updating regulatory frameworks is to ensure and make conducive to the growth and development of cooperatives while maintaining appropriate oversight to prevent abuses. Launching public awareness campaigns are to highlight the benefits of cooperatives and encourage participation from potential members and stakeholders (Uwaramutse et al, 2022). Facilitating collaboration among cooperatives, government agencies, and other stakeholders is highly demanded to share resources, best practices, and lessons learned (Cuevas & Buchenau, 2018).…”

Co-operative Governance and Financial Performance of Irish Potato Farmers’ Co-operatives in Northern and Western Provinces, Rwanda

“…Lemmi and Nakkiran (2019) and Wanyama (2014) reported adverse performance of co-operatives due to ineffective governance practices, which greatly affected the farmers' wellbeing and sustainable development. Governance is the key determinant of farmer co-operatives' performance (Uwaramutse et al, 2021;Drona & Walsh, 2018). With inadequate governance in co-operatives, co-operative performance is impaired (Ricardo & Mery, 2019) and may be difficult for co-operatives to sufficiently serve their members and contribute to their social and economic transformation.…”

“…Despite the efforts of the government and private sector actors, the financial performance of farmers' co-operatives in Rwanda is questionable (MINICOM, 2018). Most are characterised by limited financial capacity, which challenges their growth, competitive posture, and improved financial performance (Uwaramutse et al, 2022). As a result, there is high dependence on the Government and donor agencies (Niyonzima et al, 2021).…”