Capital Market Advisory Council CMAC and Financial Sector Development Program in Kigali Rwanda

ABSTARCT 

The study investigated the effect of capital market on financial sector development in Rwanda. From population 150, a sample of 132 respondents was interviewed. Analysis of data was by regression analysis. The objectives of the study were to determine the profile of respondents, to determine how CMAC contribute, to better financial intermediation in the area; to identify the market of development services put in place by CMAC in order to continue building the reputation as an innovative financier and to establish the significant relationship between capital market advisory and financial sector development programme. The findings of the study, following the research questions, revealed that there is a strong relationship between Capital market and development of financial sector in Rwanda because CMAC, through its stock exchange market will help to facilitate financial institutions to get loans by buying securities, to provide services like increasing incomes of investors, enhancing economic growth, and creating employment, to increase the profits of financial institutions, and to attract more financial companies to join Rwanda stock exchange market. The research revealed that, CMAC has a strong intervention in promotion of investor protection, insuring that markets are fair, efficient and transparent so as financial sector gets vibrant. In order to enable a smooth transition into the effective operation of capital market in Rwanda there is need to implement the following policy recommendations. There is a need to develop the confidence in the public for investing in capital market by the increased public awareness aimed at educating the public about CMAC and RSE operations. Development of an effective legal system to increase the safety and complete removal of uncertainty regarding the benefits of the resulting investments, guar anteed stable banking sector, enforcement of capital market regulations so that there is continued encouragement of the public in the bond market.

TABLE OF CONTENTS

CHAPTER PAGE

ONE THE PROBLEM AND ITS SCOPE 1

Background of the Study i

Statement of the Problem 3

Purpose of the Study 4

Objective of the study 5

Research Questions 5

Hypothesis 5

Scope 6

Significance of the Study 6

Operational Definitions of Key Terms 7

TWO REVIEW OF RELATED LITERATURE 9

Concepts, Ideas, Opinions from Authors/Experts 9

Theoretical Perspectives 14

Related Studies 17

THREE METHODOLOGY 19

Research Design 19

Research Population

Sample Size 19

Sampling Procedure 20

Data collection Instrument 20

Validity and Reliability of the Instrument 21

Data Gathering Procedures 22

Data Analysis 23

Limitations of the Study 23

FOUR PRESENTATION, ANALYSIS AND INTEPRETATION OF DATA 25

Introduction 25

FIVE FINDINGS, CONCLUSIONS, RECOMMENDATIONS 36

Findings 36

Conclusions 38

Recommendations 39

REFERENCES 41

APPENDICES 45

Appendix I - Transmittal Letter 45

Appendix II - Clearance from Ethics Committee 46

Appendix III - Informed Consent 47

Appendix IV - Research Instruments 48

Curriculum Vitae 55