The influence of Equity and Trade credit Finance structure on SME’s Growth in Rwanda

  • Emmaboles Rubunda Jomo Kenyatta University of Agriculture and technology
Keywords: Trade credit, Equity, Finance structure, Manufacturing SMEs


The study investigated the influence of equity and trade credit finance structures on the growth of manufacturing SMEs in Rwanda. Two objectives guided the study; to determine the influence of equity finance structure on the growth of manufacturing SMEs in Rwanda and to investigate the influence of trade credit finance structure on the growth of manufacturing SMEs in Rwanda. The study used a mixed research design approach for collecting and analyzing data using a target population of 868 SMEs registered with Rwanda Development Board as of November 2017. Stratified random sampling technique was utilized to draw a sample size of 273 SMEs. Close-ended questionnaires were employed in data collection and data was analyzed using Statistical Package for Social Science (SPSS) to generate descriptive statistics including percentages, frequency tables and mean scores. Multiple regression analysis was used to explore the relationship between trade credit, debt finance and growth of small and medium size manufacturing enterprises in Rwanda. Analysis of variance (ANOVA) was utilized to test the significance of the model. R2 indicted the extent of the goodness fit of the regression model. The study findings showed that equity finance had a positive and significant influence on growth of small and medium manufacturing enterprise in Rwanda. Trade credit finance was also found to have a positive and significant influence on growth of small and medium manufacturing enterprise in Rwanda. The study recommends that the management of SMEs should be trained on the use of accounts receivable and accounts payable to fully take advantage of trade credit finance structure. This will ensure the SMEs grow their operations even during time of low liquidity


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How to Cite
Rubunda, E. (2019). The influence of Equity and Trade credit Finance structure on SME’s Growth in Rwanda. Journal of Research in Business, Economics and Management, 13(2), 2443-2454. Retrieved from