UMUHOZA Marie Jeanne Phone: +250 784001015

TOPIC: THE EFFECTIVENESS OF PRIVATIZATION POLICY IN RWANDA

CHAPTER ONE: GENERAL INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Privatization of state owned enterprise has been become an important phenomenon in both
developed and developing countries. The popularity of privatization has different origins,
reflecting different hopes that are proponent for it. ( Hanke.H.Steve, 1987).

The history of privatization dates from Ancient Greece, when governments contracted out almost
everything to the private sector ( Hanke.H.Steve, 1987).

In Britain, the privatization of common lands is referred to as enclosure. Significant

privatizations of this nature occurred from 1760 to 1820, coincident with the industrial revolution
in that country.

Since 1995, the Government of Rwanda has put in place a series of economic mechanisms aimed
at reviving the national economy so as to address the deteriorating situation of public enterprises.
The privatization exercise was initiated in Rwanda in 1997 with 72 companies and institutions
included in the program. The first privatization operations were carried out in 1998. This was in
the spirit of liberalization of the economy with multilateral partners; IMF, World Bank, and it
was also in the framework of good governance adopted by the Rwandan government. (RDB,
2015)
The privatization drive was also fueled by the fact that many companies had been closed down
because either the managers had been killed or had fled outside of the country during the
genocide. Another reason was that the government had no money with which to revitalize the
many companies that had been destroyed during the war.
Five years within the privatization program, 75 % of what has been privatised so far has been
taken over by the locals. By the end of the year 2001, the privatisation process had earned the
country RWF4.2 billion ($) but expenditure on liabilities had taken FRW 2.9Billion ($ ). The big
companies lined up for sale in the coming years promise to earn the country considerable foreign
exchange. (RDB, 2015). The privatisation of these companies is expected to increase the private
sector's participation in business and at the same time reduce competition between government
owned companies and the private ones.

Benefits from the privatisation program are expected to be significant for the economy and
would help make the country's business environment more competitive. The sale of tea estates is
aimed at creating an enabling environment to facilitate the establishment of a market-based tea
industry through the introduction of private management and investment in tea estates and
factories.

It is in the essence of privatisation that the government of Rwanda has in the past few years
expressed commitment to promote the private sector participation in business. It has maintained
dialogue with the private sector and replaced the government owned chamber of Commerce with
the Private Sector Federation working jointly with the Rwanda Investment Promotion Agency
(RIPA).

RIPA seeks to improve private sector investment, launch business initiatives and ensure the
participation of the whole spectrum of private sector operators- from micro-enterprises to larger
firms. Drawing on the experience gained from the privatisation of state firms, the government
says it realises the importance of actively enforcing a clear and precise business and legal
environment.

And about the case of this study, to assure better exploitation and efficient management of
CIMERWA, the government of Rwanda and CBMC signed the contract for operation and
management of the cement plant in July 1985 as published in the official journal of the republic
of Rwanda issued 01 August 1986 Law No.7/1986 of 16 May 1985 of 16 May 1986 concerning
the approval and ratification of the contract operation and management. Therefore, CIMERWA
which was built in 1980 started its activities as a public company in 1984 and operated as a state
owned company until December 2006. (CIMERWA, 2015). This study aims at evaluating the
effectiveness of privatization policy in Rwanda based on the above case study.
1.2. STATEMENT OF THE PROBLEM

Privatization in developed and developing countries is far more extensive that is generally
realized .Developing countries world-wide are rapidly becoming more sophisticated in the use
of privatization and reducing the role of the state economy, as a structural incentive to economic
efficient and growth .It is in this case that the government shares and partnership shares in
semi- public companies to private investors as way to generate revenues and improve
performance in the companies whose performance was worsening through better management
and financial discipline in private company .It‘s claimed that the firm after privatization may not
achieve their intended objectives . An analysis on their major problems is to be made in case
privatization may not be successful as expected .Even though some firms fail, others are
successful from the privatization .Therefore, the researcher wanted to assess the effectiveness of
privatization policy in Rwanda. This will involve analyzing the performance of CIMERWA as a
case study after privatization.

1.3. OBJECTIVES OF THE STUDY.

1.3.1 General Objective

The general objective of this study is to assess the effectiveness of privatization policy in
Rwanda by using CIMERWA Ltd as a case study.

1.3.2 Specific Objectives

The specific objectives of this study are:

 To analyze some of the financial statements of CIMERWA before and after

privatization by ratios
 To assess the financial performance of CIMERWA after privatization by using ratios

Research questions

 What is a key indicator that shows the effectiveness of privatization policy?

 How to measure the performance of CIMERWA before and after of its privatization?
 Does CIMERWA reach to effective performance when it privatized?
1.4 Scope of the Study

This study used the case study, it didn’t cover all Rwandan private companies, it will only take
CIMERWA Ltd as case study and the results obtained is used to see clear image for other private
companies.

1.4.1 The content scope

This study didn’t cover all aspects of privatization but it emphasized on the benefits of
privatization policy.

1.4.2 The geographical scope

This study didn’t not cover all branches of CIMERWA Ltd such as KIMIHURURA Branch, but
it used data from headquarter locates in MUGANZA sector, Rusizi district in Western Province.

1.5 Significance of the study

This study has the greatest importance to different people and companies:

 The study acts as a basis for policy makers, planners, and responsible citizens for
reference in their attempt to understand the basic concept of privatization as an
incentive for economic recovery.
 The study provides lessons and experience of their countries, which have implemented
privatization programs.
 The study recommends measures for faulty procedures, which adopted in the
privatization process and a basis for additional literature for future researches on the
privatization policy.
 The study will also be a basis for other potential researchers to draw relevant
information and built on their relevant supplementation especially in the areas of
privatization.
 The study will also improve the researcher’s knowledge on privatization. And a part of
that, it is the great proof that the researcher has acquired full knowledge in BBA
program and then she get her degree as great reward of university studies .
1.6. Limitations of the study

This study is deemed to face the challenges:

 Time limitation: This study is going to be conducted in only one month; it not easy for
me to explore all variable of this study and submit the dissertation at the date provided
by university of Rwanda, college of business and economics.
 Resource limitation: Normally, to conduct research it involves enough money for
conducting coherent work, it not easy for me to get all amount required for all the
process of my research.
 Lack of adequate literature needed in order to conduct adequate research in private
sector
 Lack of access to the sensible information, because some business information are
confidential, and most of bank still reluctant to provide to the researchers.
 Scheduling appointment with respondent is also a big limitation because they already
have their own occupations, so it is not easy to give me their time for answering
questionnaires and being interviewed.
CHAPTER TWO: LITERATURE REVIEW

2.0. Introduction

A literature review is an evaluative report of information found in the literature related to your
selected area of study. This is going to describe, summarize, evaluate and clarify the literature
about the effectiveness of privatization policy in Rwanda. It should give a theoretical base for the
research and help the researcher to determine the nature of the research. Works which are
irrelevant should be discarded and those which are peripheral should be looked at critically.
(Williamcollins sons& co.ltd, 1979).

It provides the fact on the aspect of privatization as given by various authentic scholars and the
researcher has tried to analyse the fact given to see and find whether the outcome and future of
privatization in Rwandan a success or a failure. It is a success or a failure. It is in this case that
the researcher will identify the effectiveness of privatization policy in Rwanda.

2.1. Key terms

2.1.1 Effectiveness

The effectiveness means the degree to which objectives are achieved and the extent to which
targeted problems are solved. In contrast to efficiency, effectiveness is determined without
reference to costs and, whereas efficiency means "doing the thing right" effectiveness means
"doing the right thing." It also means the degree to which something is successful in producing a
desired result or success.

2.1.2. Meaning of Policy

A policy is a deliberate system of principles to guide decisions and achieve rational outcomes. A
policy is a statement of intent, and is implemented as a procedure or protocol. Policies are
generally adopted by the Board of or senior governance body within an organization whereas
procedures or protocols would be developed and adopted by senior executive officers.
A policy is a definite course of action adopted for the sake of expediency, facility. It is a course
of action adopted and pursued by a government, ruler, and political party
2.1.3 The meaning of privatization

Privatization refers to the transfer of assets and service functions from the public to private
hands. It ideally refers to the transfer of ownership of state owned enterprise from the
government to the private sector.

The Concept of Privatization has been defined in various ways. In popular usage, it means the
transfer of government assets and activities to the private sector. Privatization may be defined as
the transfer of a function, activity, or organization from the public to the private sector (Cowan,
1990:6, GTZ, 2004).
Privatization tends to imply a move towards the divestment of total ownership by the
government, from the public to the private sector (Nelson, 1996:10).
The term ‘privatization’ has been used to describe a range of actions designed to broaden the
scope of private sector activity, or the assimilation by the public sector of efficiency-enhancing
techniques generally employed by the private sector. Essentially privatization is the public to the
private sector of the ownership and/or control of productive assets, their allocation and pricing,
and entitlement to the residual profit flows generated by them (Adamet al., 1992:6).

Regarding the political meaning of privatization, Prof. Paul Starr argues that there may be a
broad and a more specific definition of privatization. “The first, broader definition of
privatization includes all reductions in the regulatory and spending activity of the state. The
second, more specific definition of privatization excludes deregulation and spending cuts except
when they result in a shift from public to private in the production of goods and services”. In the
narrow sense, privatization is transfer of ownership from the public to the private sector or
transfer of control over assets or activities as in the case of privatization through leasing, where
ownership is retained, leaving management of assets and activity to private parties.”
‘Privatization’ means involving the private sector in the management of the enterprise, or to sell
or lease it, or to an act to infuse participation by any means, either wholly or partly, of the private
sector or of the employees or workers (Joseph E. Stiglitz, 2001)
2.2 Forces that influence promoting Privatization
According the Savas (2000) has mentioned the five forces that influence promoting
privatization, as flows: pragmatic, economic, ideological, commercial, and populist. He
summarized the characteristics of these five forces as follows (Savas 2000:5-6):

Table 1.2.1 The Influences Promoting Privatisation

Force Goal Reasoning

Pragmatic Better Government Prudent privatization leads to
more cost effective public
services.

Economic Less Dependence on Growing affluence allows

Government more people to provide for
their own needs, making them
more receptive to privatisation

Ideological Less Government Government is too big, too

powerful, too intrusive in
people’s lives and therefore is
a danger to democracy.
Government’s political
decisions are inherently less
trustworthy than free-market
decisions.Privatisation reduces
government’s role.

Commercial More Business Opportunities Government spending is a

 large part of the economy;
more of it can and should be
directed toward private firms.
State-owned enterprises and
assets can be put to better use
by the private sector.

Populist Better Society People should have more

choice in public services.
They should be empowered to
define and address common
needs, and to establish a sense
of community by relying more
on family, neighbourhood,
church, and ethnic and
voluntary as associations and
less on distant bureaucratic
structures.

(Source: Savas, 2000: 5-6

The common explanation of why privatisation has become so important in developing nations is
the debt crisis that emerged in 1981/82 and has been continuing unabated ever since. Ira W.
Lieberman, a World Bank senior consultant and privatisation expert, has argued that the
following six factors have influenced the adoption of privatisation as a critical feature of
countries’ economic policies (Lieberman, 1993:9-11).

The first key factor is the successful economic performance of Industrialized Countries
Second, at the time that the growth model was proving so successful, there was growing
awareness that other models for economic development.
A third factor that emerged in the 1980s is what some analysts call the fourth industrial
revolution, driven by information-based technologies, which requires competitiveness.
The fourth factor is the role of state-owned enterprises, which have monopoly status and have
generally bred inefficiency and a lack of competitiveness.
A fifth factor influencing privatization in the developing countries is that in the 1980s advanced
industrial countries such as the USA and the UK expressed a strong ideological commitment to
private enterprise.
Finally, since 1989 the political revolution in Eastern Europe and the Soviet Union has lent new
impetus to the privatization process, as the newly emerging democracies in most of these
countries are utilizing privatization as a cornerstone of their economic reform process to create
the basis for a market economy.

2.3. Objectives of Privatization

The following objectives are mentioned frequently in connection with privatization
• reduce the government’s operating deficit;
• raise cash through SOE sales;
• generate new sources of tax revenue;
• deepen domestic capital markets and broaden domestic equity ownership;
•‘democratization’ of capital;
•promote domestic investment;
•attract direct foreign investment and new technology;
•increase domestic and international business confidence;
•increase competition;
•create opportunities for employment through real growth;
•increase productive and operating efficiency;
• ‘turn around’ or restructure sick SOEs;
• increase exports;
• improve the quality of services; and
• reduce the role of the state in the economy.

Bennett (1997) has categorized the commonly stated objectives of privatization as follows:
1 .Political goals, such as reducing the size of the public sector, restoring or strengthening the
private sector, spreading share ownership more widely, and making productive enterprises more
responsive and accountable to those for whom they produce;
2. Efficiency goals, such as increasing productivity and microeconomic efficiency. The
development of capital market institutions, which intermediate between savers and investors,
may also be classed as efficiency objectives;
3. Fiscal stabilization goals, such as maximizing proceeds of sales, reducing the future drain of
subventions and capital contributions from government revenue, increasing tax revenues from
higher profits and reducing the public debts;
4. Resources mobilization goals, such as promoting foreign investment in the country and
releasing limited state resources for investment in other sectors like education and health
(Bennett, 1997: 7-8).
Privatisation could have several objectives, as discussed above. However, in many cases it has
been prescribed and advocated for ensuring the economic and financial objectives as envisaged
in the economic policy for the development of a country.

2.4 Techniques of Privatization

Privatization has identified as a number of privatization techniques categorized according to the
five dimensions of privatization as follows:
A .Changes in ownership
B. Changes in performance arrangements
C. Changes in the financial base
D. Deregulation by introducing competition
The implementation of any of these means of privatization calls for a proper institutional
framework in order to manage and monitor the process of privatization.
Privatization policy, as an economic policy, has been adopted not only by developed countries
but also by developing ones. As a result, there has been a gradual transfer of government assets
and functions to the private sector. (Vuylesteke, Parker, Saal, 2003)

The above basic methods, as well as their characteristics and procedures, are summarized briefly
in the following table:
Methods Characteristics Procedures

Public offerings Distribution to the general If PSE is in required

public of all or part of shares condition, standard processing
in public limited company (as of public offering is on the
a going concern) basis of prospectus. If not in
required condition, then
readying process is necessary.
Offer can be on fixed price or
tender basis.

Private sale of Sale of all or part of Sale may be result of

shares government shareholding in a negotiation or competitive
stock corporation (as a going bidding process. May be done
concern) to a single entity or ad hoc or may be subject to
group. Can take various forms mandatory country procedures
such as a direct acquisition by or guidelines on valuation,
another corporate entity or a prequalification, evaluation of
private placement targeting proposals, terms of payment,
institutional investors. Can be etc. In some cases, prior
full or partial privatisation (i.e. restructuring is necessary.
transformation into joint Involves investor search.
venture).

Sale of Sale of assets (instead of Alternatives: sale of assets by

government or shares); private sale government; disposal of some
assets by PSE; dissolution of
enterprise assets PSE and sale of all assets;
other procedures for private
sale of shares generally apply.

Fragmentation Reorganisation of a PSE into Alternatives: sale of assets by

several entities (or one holding government; disposal of some
company and several assets by PSE; dissolution of
subsidiaries). Each entity will PSE and sale of all assets;
then be privatised separately. other procedures for private
sale of shares generally apply.

Fragmentation Reorganisation of a PSE into Depends on structure of PSE

several entities (or one holding
company and several
subsidiaries). Each entity will
then be privatised separately.
New private Depends on structure of PSE. Public offerings or private
investment in Primary share issue subscribed issue of new shares on basis of
PSE by the private sector (dilution standard procedures for new
of government’s equity issues possibly in conjunction
position). with disposal of government
equity. New private
investment may be for
capitalization of new company
embodying assets transferred
by government.

Management/ Acquisition by management Negotiations by government,

employee buy- and/or work force of management, employees and
out controlling interest in PSE. lenders to cover wide range of
 Leveraged management / issues.
employee buyout consists of
purchase of shares on credit
extended either by seller
(government) or by financial
institutions.

(Source: UNESCAP 1999:22)

The main characteristics of the various methods of privatization, procedures, preferred

applications/ special features and implementation issues which are not discussed here will be
discussed in subsequent chapters to avoid the duplication (although they have been discussed
very briefly in above table).
Methods and procedures for privatization will be largely determined by:
(a) the objectives of the government;
(b) the current organizational form of the SOE;
(c) the financial condition and record of performance of the SOE;
(d) the sector of activity of the SOE;
(e) the ability to mobilize private sector resources;
(f) the degree of development of the capital market; and
(g) Socio-political factors.

2.5 Implementation of Policies

2.5.1 What is Policy Implementation?
Policy implementation encompasses those actions by public and private individuals (or groups)
that are directed at the achievement of objectives set forth in prior policy decisions. This includes
both on-time efforts to transform decisions into operational terms, as well as continuing efforts to
achieve the major and minor changes mandated by policy decisions. (Van Meter and Van Horn,
1975:447) .

Implementing a public policy may include a wide variety of actions: issuing and enforcing
directives, disbursing funds, making loans, awarding grants, signing contracts, collecting data,
disseminating information, analysing problems, assigning and hiring personnel, creating
organizational units, proposing alternatives, planning for the future, and negotiating with private
citizens, business, interest groups, legislative committees, bureaucratic units, and even other
countries (Edwards, 1984:2).
If we consider implementation as a process of putting policy into effect, it is,
Fundamentally dependent on:
1 .Knowing what you want to do
2. The availability of the required resources
3. The ability to manage and control these resources to achieve the desired result .

According to Lane (1995) implementation assessment focuses on the operation of a public policy
and its consequences. It includes three logically separate activities:

(a) Clarification of the objectives involved (the goal functions),

(b)Statement of the relationship between outputs and outcomes in terms of causal
effectiveness(the causal function), and
(c) Clarification of the relation between objectives and outcomes in order to
affirm the extent of goal achievement (the accomplishment function) (Lane, 1995: 98-99).

2.5.2 Forms of privatization

There are four main method of privatization:

1. Share issue privatization (sip) - selling shares on the stock market

2. Asset sale privatization - selling an entire organization (or part of it) to a strategic
investor, usually by auction or by using the Treuhand model
3. Voucher privatization - distributing shares of ownership to all citizens, usually for free or
at a very low price.
4. Privatization from below - Start-up of new private businesses in formerly socialist
countries. As a result of higher political and currency risk deterring foreign investors,
asset sales occur more commonly in developing countries.

Privatization can be implemented by several methods as follows:

 Sale
 Lease
 Management Contract
 Build
 Build-Operate-Transfer (BOT)
 Build-Operate-Own
 Build-Operate
 Build-Lease-Transfer
 Land Development/Land Swap

2.6 Challenging issues in local privatization

Analysis of local privatization is giving increasing relevance to the insights provided by

transaction costs and industrial organization theories. These theories point to the importance of a
sector's market structure and incentives as the key factors explaining differences between sectors
and dynamics within sectors. By focusing on incentives we see how contracting creates pressure
on managers to benchmark costs and production practices with private actors. It also encourages
managers to consider other innovations that could increase efficiency. We draw on our own work
and that of papers presented by members of the Scientific Committee at the Barcelona
International Workshop on ``Local Government Reform: Privatization and Public Private
Collaboration'', which has been organized in June 2006 at the University of Barcelona, Spain.
We give critical attention to the challenges of managing costs, structuring the market, and
managing political interests.

2.7 Local privatization and costs

A primary goal of local government privatization is cost reduction. Early surveys of the literature
concluded that privatization was linked to cost savings. However, meta-analyses including more
recent studies emphasized that the evidence is mixed and no systematic relation between private
production of public services and costs savings can be proven. More recent studies are less likely
to find cost savings with privatization (Donahue, 1989)(Bel and Costas, 2006; Dijkgraaf and
Gradus, 2008).
2.8. The dynamics of service delivery choices
Markets are dynamic and so are local government service delivery decisions. Local government
contracting is not a simple decision. It involves a broad array of choices(Warner and Hebdon,
2001) and requires a dynamic view of contracting behavior over time. This reverse contracting is
growing in the US and reflects a pragmatic `social choice' market management approach (Hefetz
and Warner, 2007).
 Prices and political interests
Privatization has long been linked to political and financial interests (Bel, 2006a;2006b). At the
local government level we see a pragmatic politics where ideology is of limited importance and
management of interest groups is more critical. However, political interests may work in
opposite ways than expected. Hebdon and Jalette (2008) present the first-ever survey on
Canadian municipalities' use of privatization and find it is higher than in the US despite Canada's
more communitarian ideology(Miralles,Hebdon,compare , 2008)
They determine that pragmatism and social choice provide better explanations because local
privatization choices are driven as much by contract costs as by political interest management.
They conclude that managers are pragmatists who balance citizen voice, political interests. He
builds a simple theoretical model with two types of consumers, industrial and residential, where
the local regulator solves a maximization problem of a weighted sum of surpluses and profits
(Miralles,Hebdon,compare , 2008) The future privatization policy in Rwanda
Privatization posses a competitive threat thus, it causes government agencies adopt the wall
known, good management techniques. The future privatization in Rwanda considering the main
goals and objectives of the government to privatize may be brighter in Rwanda if it retains a kind
of trouble focus that privatization has led to a wide competitive market that has opened the
boarders to the world.

Private companies in Rwanda like elsewhere in the world has had contend with political
interference, shaky and uncertain legal environment, with scarce capital, resources and
management talent, and with infrastructure difficulties. They have attempted to survive in small
volatile external markets. Hence if these problems are tackled, privatization may be a failure in
Rwanda.

2.9 Conclusion.

Privatization has become an important phenomenon in both developed and developing countries.
Therefore, the theoretical reasons why privatized arrangements should be better than
governmental ones in accord with common sense, more over they are supported by practical
experiences and confirmed by authoritative studies.

Privatization can produce large and long lasting improvements because it involves institutional
change rather than spasmodic exhortation. Privatization is a strategic approach that causes
government agencies to adopt good management skills. However one would say that
privatization is both a means and an end ton economic recovery and development. Privatization
in Rwanda like other developing countries should address the problem of enterprises
performance and productivity in particular.

CHAPTER 3 METHODOLOGY
3.0. Introduction
In this research it is clearly explaining the research design; study area and study population;
sampling methods and; research procedure; the data collection methods to be used while in the
field; data quality issues; presentation; ethical issues and data analysis.

3.1 Research Design

Designing a study helped the researcher to plan and implement the study in a way that helped the
researcher to obtain intended results, thus increasing the chances of obtaining information that
could be associated with the real situation (Burns & Grove 2001).

In this research it is going to take CIMERWA Ltd as case study. The qualitative approach was
undertaken and this case study was selected for the purpose of understanding the whole aspect of
public privatized companies in Rwanda and elsewhere as well.

3.2 Population and sampling

According to Polit and Hungler (1999), the population is an aggregate or totality of all the
objects, subjects or members that conform to a set of specifications, whereas sampling consists in
the process of selecting a portion of the population to represent the entire population.

3.2.1. Targeted population

In this study the population was 72 privatized companies

3.2.2 Sample size

The sample size of my study is CIMERWA takes a portion of 0.72 % of total privatized
companies in Rwanda.

3.2.3. Sampling method

The purposive sampling was utilized to select CIMERWA based on these criteria:

Random sampling was conducted to select CIMERWA among the private companies and then it
is where the study took place.
I have chosen CIMERWA because it is easy to get the information about it and then the location
of it, is my birth place

The knowledge i have about CIMERWA can perhaps to help me to conclude through historical
knowledge. Out of accessing on secondary data.

3.3 Data Collection Methods

Data in this study was collected using different methods:

1. Primary data.
A primary inquiry is one in which the data are going to be collected for the first time by the
investigators, therefore primary data are those that are collected a fresh .In collection of primary
data ,the method of observation and interviews was applied.

 Interview method.

This method involves exchange of ideas between the interviewers (researcher) and the
interviewee. The information obtained supplements the information obtained through interview
the different staff members of CIMERWA Ltd. The research was much better acquainted with
the knowledge in the respect to the topic under study and thus the attainment of the research
objective

2. Secondary data
In this respect data was revealed from documentary review especially textbooks, magazines,
internet source, and any other documents that was deemed necessary such as financial statements
(income statements and balance sheet) and documents related to the company.

3.4 Data Analysis and interpretation

This study did its data analysis mainly qualitatively as well. The study variable involve a lot of
statistics and these had been effectively analysed using financial statements, ratios, percentages
among statements of different financial years .However, narrative analysis and explanations had
been undertaken while elaborating the findings.
3.5 Limitations of the study

The following are some of the problems that the researcher faced during the study.

First are far most the time given to carry out this research in short, given the fact that the life of
the people on the successes through CIMERWA Ltd is not readily available in Rwanda so the
researcher has to visit different libraries, makes references from newspapers and the costs in
printing surfing on the net.

Some respondents were busy and mobile and were not easily found implying that their
responses, opinions and attitudes were not obtained. However, the findings under this study
assumed not to be biased because the respondents were scientifically selected.

The use of research assistants can bring about inconsistency in the administration of the
questionnaires in terms of time of administration, understanding of the items in the
questionnaires and explanations given to the respondents. To minimize this threat, the research
assistants were oriented and briefed on the procedures to be done in data collection.

This study being a case study was supposed to be carried out on the entire country but because of
limited resources and time, the study covered only three financial institutions. Although only
three financial institutions were used out of all the financial institutions in the district they were
scientifically selected to minimize the errors and as such the results were derived from the
cooperatives, was reliable. Besides, cooperatives used in this study would be have existed for
along time, be stable, have reasonable capital base. Hence the findings from the study were
assumed to be representative of the whole situation in the district.

3.6 Data Quality

In this study, data quality maintained by using appropriate research tools that allows the research
to collect quality information from the respondents, in addition this research will be based on
primary data ;hence to get the validity data that helped researcher to draw conclusion.

3.7 Ethical Consideration

To ensure confidentiality of the information provided by the respondents and to ascertain the
practice of ethics in this study, the following activities were implemented by the researcher:

1. Seek permission to adopt the standardized questionnaire on school effectiveness through a

written communication to the author.
2. The respondents were coded instead of reflecting the names.
3. Solicit permission through a written request to the concerned officials included in the study.
4. Request the respondents to sign in the Informed Consent Form
5. Acknowledge the authors quoted in this study and the author of the standardized instrument
through citations and referencing.
6. Present the findings in a generalized manner