Rwanda:
Micro Finance Institutions Told to Step Up
Kigali — Micro Finance Institutions (MFIs) here have been asked to provide more affordable financial services to people living in rural areas.
The Executive Secretary of Association of Microfinance Institutions in Rwanda-AMIR Rita Ngarambe said that MFIs play a vital role as providers of banking facilitates by being flexible and offering products tailored for rural populations.
"There is market for MFIs in rural areas, what is needed now is to design products that are suitable for the rural poor and also go down to the ground and open their branches," she told East African Business Week.
Many MFIs have been criticised for not stepping up to help increase the percentage of people using banking facilities.
"With our financial sector structure, MFIs and Saccos should be established closer to the populations, with more flexible products than banks such as providing loans of few amounts and at lowest rates," Job Opar, a consumer Protection Consultant said.
Accoridng to Finscope Survey 2012 , 72% of Rwandan adults (about 3.2 million) have or use financial products, with 1.3 million Rwandans currently financially excluded while the rate of Rwandans with savings went up to 68% from 54% in 2008.
MFIs have been criticised for having the highest interest rates which range from 16%- 26 %. Long bureaucratic procedures has also been highlighted for loan processing, which affects credit access mainly to the rural folk who cannot read and write.
"If the staff at MFIs have the capacity to either interpret or write loan requirements and agreement in a language their clients understand, I think that would be part of an affordable service provision and would quicken inclusion," Opar said.
Jessica Massi, an expert in the micro finance sector, said that MFIs have managed to establish themselves closer to people
She however said they still face challenges in capacity building, high operational costs and lack of awareness among people on financial products available at MFIs. "Most staff at MFIs don't have enough expertise in financial products, risk and loan management which is a big challenge," she said
Ngarambe however noted that their association, together with development partners has started helping MFIs build the capacity of their staff in risk and loan management and product designing which has in turn minimised the non-performing loans.
According to the Rwanda Central Bank figures the micro finance sector recorded a reduction in their non performing loans ratio from 12% to 8.5%, an indication that the sector is steadily growing.
Micro Finance Institutions Told to Step Up
Kigali — Micro Finance Institutions (MFIs) here have been asked to provide more affordable financial services to people living in rural areas.
The Executive Secretary of Association of Microfinance Institutions in Rwanda-AMIR Rita Ngarambe said that MFIs play a vital role as providers of banking facilitates by being flexible and offering products tailored for rural populations.
"There is market for MFIs in rural areas, what is needed now is to design products that are suitable for the rural poor and also go down to the ground and open their branches," she told East African Business Week.
Many MFIs have been criticised for not stepping up to help increase the percentage of people using banking facilities.
"With our financial sector structure, MFIs and Saccos should be established closer to the populations, with more flexible products than banks such as providing loans of few amounts and at lowest rates," Job Opar, a consumer Protection Consultant said.
Accoridng to Finscope Survey 2012 , 72% of Rwandan adults (about 3.2 million) have or use financial products, with 1.3 million Rwandans currently financially excluded while the rate of Rwandans with savings went up to 68% from 54% in 2008.
MFIs have been criticised for having the highest interest rates which range from 16%- 26 %. Long bureaucratic procedures has also been highlighted for loan processing, which affects credit access mainly to the rural folk who cannot read and write.
"If the staff at MFIs have the capacity to either interpret or write loan requirements and agreement in a language their clients understand, I think that would be part of an affordable service provision and would quicken inclusion," Opar said.
Jessica Massi, an expert in the micro finance sector, said that MFIs have managed to establish themselves closer to people
She however said they still face challenges in capacity building, high operational costs and lack of awareness among people on financial products available at MFIs. "Most staff at MFIs don't have enough expertise in financial products, risk and loan management which is a big challenge," she said
Ngarambe however noted that their association, together with development partners has started helping MFIs build the capacity of their staff in risk and loan management and product designing which has in turn minimised the non-performing loans.
According to the Rwanda Central Bank figures the micro finance sector recorded a reduction in their non performing loans ratio from 12% to 8.5%, an indication that the sector is steadily growing.
Source: AllAfrica.Com
