The Evolution of Financial Reporting Practices in Rwanda's Microfinance Institutions
Year: 2024
Type: article
Abstract: This study investigates the evolution of financial reporting practices in Rwanda's microfinance institutions (MFIs) up to 2012, emphasizing the interplay between regulatory frameworks, institutional capacity, and global standards. Employing a qualitative methodology, data were sourced from government reports, regulatory guidelines, and academic publications. Linear regression analysis revealed a significant increase in IFRS adoption, rising from 10% in 2007 to 75% in 2012 (p < 0.01), while timeliness in financial reporting improved from 50% to 82% over the same period. A correlation analysis demonstrated a strong positive relationship (r = 0.72, p < 0.01) between IFRS compliance and institutional sustainability metrics. Despite these advancements, challenges such as inadequate training (78% of MFIs) and high compliance costs (65%) were prevalent, particularly in smaller MFIs. The study concludes that while Rwanda's MFIs have made significant progress in financial reporting, further investments in capacity-building and technology integration are critical. Recommendations include subsidized training, equitable resource allocation, and strengthened regulatory enforcement to ensure sustainable practices.
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W6949072013
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