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.
