Contribution of Bank Credit on Performance of Mining Companies in Rwanda A Case Study of Rwanda Mining Association (RMA)

Munyambonera Thomas, Dr. Patrick Mulyungi

Abstract: Naturally, mining business is so expensive that without access to bank loan it would be difficult for mining companies to significantly improve their performance. The main objective of this research was to investigate the contribution of bank credit on performance of mining companies in Rwanda using a case study of RMA. The results from the study are mainly based on primary data collected from a sample of 122 companies that was selected in a population size of 176 mining companies. Questionnaires and semi structured interviews were used to collect both qualitative and quantitative data from the field and it was entered and analyzed using SPSS. The overall findings from the study have shown that bank credit has a positive impact on mining sector performance in Rwanda. It was shown that bank credit has helped mining companies to improve their performance at all levels especially in mineral production and environmental protection. The results have also shown that mining companies suffer from low access to bank credit as for every 100 mining companies who requested bank loan, only few of them (31.5 %) have got it while the majority of them (68.5 %) were refused bank loan. The study has recommended all actors in mining to put together their efforts for solving the issue of low access to bank loan for mining companies.

Keywords: Bank credit, mining, performance, short-term loan, medium term loan long-term credit