Rwanda microfinance magazine issue 3 by HAKUZIMANA

Rwanda Microfinance Magazine | No. 3| August 2014

Rabobank Foundation in Rwanda

rom 15 to 20 June a delega on from Rabobank brought a visit to Umutanguha Finance. Rabobank is a large banking group based on coopera ve principles based in the Netherlands. Its subsidiary Rabobank Founda on supports numerous SACCOs and MFIs in the country, both with loans and technical assistance. Umutanguha is partnering with Rabobank since 2012, and it has a special twinning rela onship with Rabobank ‘Oosterschelde’ located in the south-western delta of the Schelde river on The Netherlands. The Rabobank delega on comprised four members: the Internal Aﬀairs Manager of Rabobank Oosterschelde, the account manager for small and medium enterprises (SMEs), the financial controller of Rabobank Founda on, and a lady member of the Bank, herself (with her husband) being a large seed potato grower. The interest of the group went to financing facili es of Umutanguha to farmers and upcoming agribusiness enterprises. In addi on, they exchanged on the transforma on process of Umutanguha which showed similari es with Rabobank Oosterschelde that also went through a series of fusions over the last decade. The group made trips to the branches of Kabaye and Gasarenda, and the youth training programme in Nyanza district. Numerous clients in the agricultural and agribusiness sector were visited, including

the coopera ve milk collec on center of Gasarenda. ‘Motards’ in Nyanza showed them their new motorcycles that Umutanguha financed through a microlease arrangement. The Rabobank visitors said they were impressed with the growth of the ins tu on, and the way Umutanguha effec vely served small rural clients in isolated zones of the country. They have heard the tes monies of these clients that have reached a level of rela ve wealth through a series of small and increasing loans. Umutanguha Finance is one of two MFIs that have successfully implemented microleases. August will see the kick-off of the second phase of the AMIR-Rabobank Founda on leasing project. Three more MFI have been selected out of ten contenders. They will receive intensive technical assistance in commercial and business development in microleasing, organiza onal ma ers, IT and legal affairs, and finally in opera ons, sales and marke ng. The objec ve is that the par cipa ng MFIs will be able to expand their lease por olio without external support and keep the arrears rate of lease payments well below 5%. Further capacity building in leasing, both at AMIR and individual MFI level will be sought with financial support from AFR (Access to Finance Rwanda). Smallholder financing is being promoted among Rwandan MFIs through a focused training and coaching programme funded by Rabobank and Terrafina. Agricultural finance, including microloans to small emerging farmers and ca le keepers is a Government priority. We con nue to receive Follow-up requests from other MFIs that are keen to expand their agricultural por olio. Finally, Rabobank Founda on is currently considering lending to non-AMIR members. Through RCA a loan request has been received from an Umurenge SACCO that is currently being instructed. If successful, it can open the door for more U-SACCO refinancing by the Rabobank Founda on. Frank Bakx

Contents Editorial

P.2

Robobank Founda on in Rwanda P.3 SBFIC Board of Trustees visits Rwanda P.4 Saving in schools gain momentum P.6 Clecam pulled me out of Shackles of poverty to a gallant woman with status and value. P.8 Refinancing for Microfinance Ins tu on in Rwanda

P.9

Youth – an opportunity to extend financial services P.10 AMIR’s quest to bring Imirenge SACCOs onboard P.12 Exclusive interview with Nathan Ross- Vision Finance Manager P14 Performance monitoring tool P.16 From subsistance to large scale producer; thanks to CLECAM P.19 Taking agriculture to the next level: COOPEC Twizigamire P.20 Making the Leap…

P.23

AMIR And SBFIC successfully launch RICEM project

P.25

Rwanda Microfinance Magazine

Publisher Association of Microfinance Institutions in Rwanda Editor in Chief Jean Damascène Hakuzimana Editor Irigoga Charlotte Advisors Peter Rwema Thomas Konitzer Britta Konitzer Contributors Jean Pierre Bucyensenge Dady Sadiki Rubangura Umutoni Laetitia Irigoga Charlotte

Rwanda Microfinance Magazine | No. 3| August 2014

SAVINGS IN SCHOOLS GAIN MOMENTUM

Best saving pupils receive awards

isit any upcountry school and you will get

it,” she said.

amazed at how much the pupils/students

But Mugurwanyana has no inten ons of spending

understand that they have to save the li le they

all her money on school materials. Her objec ve

receive from their parents. They have even gone an

is to raise at least Rwf 16,000 by next year to buy a

extra step and formed savings clubs.

goat that she will keep at home. “By the me I finish

“The most important thing is to start with the li le

secondary school, the goat should have given birth.

money you get, and with pa ence, one may end up a

I will eventually start a goat farming project,” she

millionaire,” said Zawadi Mugurwanyana, a senior five

says, adding that it is a viable project in her district of

student at Ecole Secondaire Rusumo, Kirehe District.

Kayonza, Eastern Province.

The teen has so far managed to save Rwf1000 with

Her colleague, Gaspard Munyampundu, who is in

a local micro finance ins tu on (Umurenge Sacco).

senior six, has raised Rwf 2,500 since last month. He

Mugurwanyana started saving last month a er

says his dream is to start modern farming.

undergoing training on saving and being helped to

“I will grow bananas in a modern way that my village

open an account by her school.

mates have never even seen,” he said, disclosing that

Although the money is s ll li le, the student is proud

his parents raise Rwf 80,000 per month from selling

of her achievement.

bananas in Kirehe district.

“If I need a note book or soap, I cannot disturb my

Munyampundu is op mis c that once he adopts

parents because this amount (Rwf1, 000) would cover

Rwanda Microfinance Magazine | No. 3| August 2014

modern farming methods and keeps saving, he will be

that in the future the country will have a genera on

able to set up a maize mill that he has dreamt of since

of ci zens with great entrepreneurial minds and

childhood.

strong financial discipline. The children have started

This savings culture is not unique to secondary schools

acquiring knowledge and skills about small enterprise

but also primary schools are involved.

crea on and savings. AMIR, DFID/MINEDUCA and

Edouard Sibomana, the Director of Rubengera I

SBFIC are proud that this 4-year old ini a ve has

Primary School in Karongi district, Western Province

been a ended by more than 500 teachers who in turn

said his pupils grow vegetables in the school garden

will sow financial educa on seed. Through children

and sell them to their parents.

savings, a deposit of more that 140millions has been

“So far, they have Rwf 34,000 on their account and

deposited and more than 30.000 accounts were

bigger things are in the pipeline,” he said.

opened through this project.

Rubengera School which started this saving project

Financial ins tu ons are confident that the young

last year has le a glowing smile on Sibomana’s face.

savers will be the country’s top investors in 30 years.

He cited a case of a pupil who wanted to register for

Florent Majyambere, the Managing Director of

na onal exams but his parents could not aﬀord the

Uniclecam Wisigara Coopera ve, an umbrella of

required Rwf3, 000 at the me. They expected to get

financial Ins tu ons in Rubavu district, has 6,000

it a er three weeks.

pupils and students with over Rwf19m in savings.

“This bright child told the parents that he was going to withdraw the money from his account on condi on

Why save

that they refund it. And the deal was concluded,”

Ngirinshu

Sibomana explained.

ini a ve is to teach students how to save from their

E enne says the main objec ve of the

li le pocket money and also understand that they How it started

have the poten al to contribute to their country’s

FINANCIAL educa on to school children is a founda on

development.

for inculca ng financial values and the savings culture.

“The teachers advise us that if we save a small por on

When Rwandan children are exposed to these values,

of our pocket money, we will not only buy doughnuts

they grow up to become advocates of the savings

to eat, but can make and sell them as well,” said

culture which is s ll very poor in the country.

Mugurwanyana.

The ongoing financial literacy campaign in schools by

The children, however, are not taught to save money

the Associa on of Microfinance Ins tu ons in Rwanda

only. Mugurwanyana says they are also taught to avoid

(AMIR) in collabora on with Innova on for Educa on

wastage. For instance he says he cannot buy a new

Fund in the Ministry of educa on, Savings Bank

book before it’s used up simply because he is going to

Founda on for Interna onal Coopera on-SBFIC and

another class.

other partners started some four years back. It came

“We have learnt that whatever you preserve and

into force to tackle the habitude of Rwandans whose

take good care of discourages you from spending

culture of savings is not yet developed according to

unnecessarily,” said Mugurwanyana.

sta s cs. Providing financial educa on to young people means

Bri a Konitzer

Rwanda Microfinance Magazine | No. 3| August 2014

CLECAM PULLED ME OUT OF SHACKLES OF POV ERT Y TO A GALLANT WOMAN WITH STATUS AND VALUE.

plots of lands in the near future. ‘CLECAM is not only a coopera ve but also a helper and partner because all the things I have today, I accredit them to working with it, ranging from the advices I got about what kind of project I can do to improve my life and so forth.” She narrates.

Anastasia shows off some of her produce Nyirabatunzi Anastasia is a resident of Mushonyi Sector,Biruyi Cell in Rutsiro District, Western Province. She started working with CLECAM Biruyi in 2005. “Since then my life has never been the same again.” notes Anastasia. Nyirabatunzi a mother of six says that before joining CLECAM, her family was in extreme poverty to an extent that could not aﬀord to buy the cheapest shoes for her or children and the small piece of land she owned could not help much to sa sfy the needs of her family. 2005 was a year of breakthrough for Nyirabatunzi. She joined CLECAM where she immediately applied for a loan of 20.000 which she used to start pig rearing. “The first me I got the loan worth Rwf20.000 I used it to buy three pigs that gave birth to other ten, I sold them and the money I earned helped me to pay the loan, later I acquired another loan which I used to purchase another piece of land. And my life begun to change.” says Nyirabatunzi. Nyirabatunzi now plans to build a new house in one of her

Nyirabatunzi says CLECAM made her feel confident about herself to get a loan and never to fear reques ng for a big amount of money. This is because she has now known how to use it and pay back in the right me. 42 Years old mother of six, says she is able to pay school fees for her 6 children, four in Secondary schools, two in primary from her livestock proceeds and that all her children have accounts in CLECAM Biruyi where each of them saves from Rwf1000 and above. The earnings from this livestock and farming enables me to support my children who are in private schools where i pay Rwf820000 for the one in senior three and senior four , Rwf640000 for one in senior two per term. When she is done with paying school fees, she is able to save Rwf 200 000 and also save for her children on their individual accounts, as compared to the past where the biggest amount she could save was Rwf500. “ I assure people who have not yet joined microfinance ins tu ons that it is a good place to be for everyone poor or rich , I feel comfortable to save and ask for a loan here.” Says Nyirabatunzi. Lae

a Umutoni

Rwanda Microfinance Magazine | No. 3| August 2014

Refinancing for Microfinance Ins titutions in Rwanda

Rwandan

Na onal

Microfinance

Policy

emphasizes the role that the microfinance

on value-added ac vi es in the industrial and service sectors.

sector can play in the a ainment of the goals of Government’s Vision 2020 programme, which consists

The Rwandan microfinance sector con nues to show

of transforming Rwanda from a low-income into a

strong growth with assets increasing by 27.4% between

medium-income country with a dynamic, diversified

December 2012 and December 2013, rising from RWF

and compe

ve economy. Moreover, the Na onal

101 billion to RWF 128.7 billion. The SACCOs are equally

Economic Development and Poverty Reduc on

pos ng strong results with deposits growing by 31%

Strategy (EDPRS II) aims to bring the number of the

in 2013. Despite the strong growth, the microfinance

people below the poverty line to less than 30% by

sector is faced with numerous challenges which

2018.To accomplish the EDPRS II aspira ons, Rwanda

include high concentra on of services in urban and

needs a robust and suppor ve financial sector with

semi-urban areas; inadequate staﬀ skills; lack of or

suitable ins tu onal and regulatory framework,

underdeveloped IT and informa on systems; limited

eﬀec ve

intermedia on

financial management and accoun ng; and lack of

and adequate provision of credit to the economy.

financing to fund por olio growth. These challenges

Microfinance is seen as an important instrument in

are likely to hold back microfinance from performing

the implementa on of the EDPRS II by helping to build

its role in contribu ng to employment crea on and

a solid business community of entrepreneurs focused

sustainable poverty reduc on.

and

eﬃcient

financial

Rwanda Microfinance Magazine | No. 3| August 2014

In the frame of its financial sector ini a ves, Access

Suﬃcient funding is a significant constraint to por olio

to Finance Rwanda (AFR) recently commissioned a

growth and it seems to be holding back improved access

study to analyze reasons for, and to es mate the size

to microfinance services in general. To help address

of the refinancing gap for microfinance ins tu ons

this market failure in the refinancing market, AFR with

(MFIs) and SACCOs in Rwanda. All MFIs par cipa ng

support from the German Development Bank KfW will

in the study men oned a lack of access to external

establish the Microfinance Challenge Fund which will

debt funding at a rac ve rates and flexible collateral

provide customized and comprehensive package of TA

requirements as a cri cal bo leneck in scaling up the

support complemented by refinancing to select MFIs.

loan por olio and realizing a deeper outreach into

To be selected, the MFI must demonstrate credible

rural areas. Commercial banks, which should naturally

promise for innova on, sustainable growth and

be the first point of call are not adequately lending to

rural outreach as well as a track record of consistent

MFIs due to the perceived high risk profile of MFIs.

ins tu onal improvement. AFR’s inten on is to groom

For example, the average short-term nominal interest

these ins tu ons to become future champions of pro-

rate on commercial loans for the microfinance sector

poor micro-financial services that will in due course

currently ranges between 18% - 19% p.a. These kinds

have the capacity and profile that would enable them

of rates are una rac ve to most MFIs considering that

to tap into conven onal microfinance funding from

they have to take into account their rela vely high

commercial banks and other investors in microfinance.

opera onal costs while determining the interest rate

The Challenge Fund campaign has already been

to the end borrowers. Most MFIs also face challenges

launched.

in accessing interna onal refinancing due to the o en risk-averse nature of interna onal investors that

Ivan MURENZI/AFR

prefer inves ng in larger and more stable MFIs.

Youth – an oppor tunit y to ex tend financial services

youth

(aged

14-35

years)

cons tute

market-relevant skills, work readiness and links to the

approximately 40% of the total popula on in

employment and self-employment job market and by

Rwanda where 78.7% is under 35 years of age. Recent

providing resources, a posi ve environment is created

sta s cs from the 2012 FinScope Survey show that

for development of new economic opportuni es and

the youth is among the most financially excluded

sustainable livelihoods.

popula on groups in Rwanda and that alarmingly

As youth start and grow their businesses, they are

43% of youth aged 18-20 years have no access to any

in dire need of appropriate and aﬀordable financial

financial services at all.

services to sustain and develop their livelihoods. However, as youth are considered high-risk clients

Several ini a ves aimed at empowering

and because of lack of collateral,

youth to be economically ac ve ci zens

Financial

are

MFIs and SACCOs) in Rwanda

both government and non-governmental

barely oﬀer any services targeted

ins tu ons.

at this popula on group.

currently

being By

implemented

suppor ng

youth

entrepreneurship through provision of

Ins tu ons

(banks,

Rwanda Microfinance Magazine | No. 3| August 2014 To promote access to financial services for youth, Access to Finance Rwanda (AFR) has invited FIs to submit concept notes for funding of youth related products. AFR has three key objec ves of suppor ng development of youth financial services: 1. To increase youthsâ&#x20AC;&#x2122; access to appropriate, demand driven financial services 2. To build up financial service provider capacity to provide comprehensive youth services, including providers of financial and non-financial services, as well as related policy makers; 3. To create and mobilise knowledge related to youth financial and non-financial services in Rwanda. Although not all youth are economically ac ve, a majority of them have financial service needs for loans, savings, insurance and money transfers. AFR will emphasise savings mobilisa on, as recent research has pointed out that youth o en enter financial markets through accessing a savingâ&#x20AC;&#x2122;s accounts. Youth generally begin with small balances in accounts that charge low or no service charges. In addi on, youth can use savings to

Some youth in motorcyle riding business

become familiar with FIs and demonstrate their income flows for considera on for future loans if needed.

Ivan MURENZI/AFR

Rwanda Microfinance Magazine | No. 3| August 2014

AMIR’s Ques t to bring Imirenge SACCOs onboard

By Jean Pierre Bucyensenge

However as new ins tu ons and despite the many steps they have gone in building successful community-oriented

When the Rwandan Government mulled over the idea

business models, the coopera ves s ll face a lot of

of establishing community-based savings and credits

challenges in their daily ac vi es which are aﬀec ng their

coopera ves which were to be managed and owned by

businesses and their capacity to provide high-end services

ci zens themselves under the support and guidance of

to their members.

financial experts, it wanted to increase access to financial

It is in that regard that the Associa on of Micro-

services by ci zens, especially those in rural areas.

Finance Ins tu ons in Rwanda (AMIR) wants to help the coopera ves look up for ways of solving the challenges they

The ra onale behind the ini a ve was due to the fact that

are s ll facing.

commercial banks are more concentrated in urban areas

AMIR, which already brings together 62 micro-finance

and less present in rural areas, according to oﬃcials.

ins tu ons across the country, wants the SACCOs to

A research conducted in 2008 established that only 21

join it as a way of bringing together their savoir-faire

per cent of the Rwandans were working with financial

towards building far stronger ins tu ons, according to the

ins tu ons. Subsequently, the government devised ways

organisa on’s oﬃcials.

of increasing the number, thus ini a ng the sector based

For the past few months, AMIR has been organising round-

savings and credits coopera ves (Umurenge SACCOs) that

tables mee ngs bringing together SACCO managers to

same year.

discuss their challenges as heads of ins tu ons, and devise

Umurenge SACCO is a community microfinance programme

solu ons against them and benefits of joining the micro-

which seeks to strengthen the financial sector through

finance associa on.

enabling the general popula on to have easy access to

During these roundtables, Imirenge SACCOs managers are

finance and related services.

introduced to what AMIR is, what the organisa on is doing

There are 416 sector-based SACCOs in total spread across

to develop the micro-finance sector in the country, which

all the districts in the country.

services it is rendering to micro-finance ins tu ons and

Rwanda Microfinance Magazine | No. 3| August 2014

much more informa on with the aim of bringing them on

“I believe joining AMIR would help tackle some of the

board.

SACCOs challenges. They have many needs in terms of

These roundtables were a success thanks to the financial

capacity building, financial educa on, advocacy and

support from the Savings Banks Founda on for Interna onal

lobbying. They really need to have an associa on which is

Coopera on (SBFIC).

lobbying for them and which is rendering services for them,” Konitzer says. She adds that “I am strongly convinced that

Interes ng move

AMIR can really contribute and add value to those Imirenge

According to Jean Marie Vianney Nzagahimana, AMIR’s

SACCOs.”

chairperson, the ini a ve to make SACCOs members of the

In an interview with this Magazine, the minister of Trade

microfinance associa on is set to benefit both SACCOs and

and Industry Francois Kanimba welcomed the move and

AMIR.

said SACCOs are set to benefit from it.

“AMIR will step up eﬀorts to advocate for the SACCOs, come

Kanimba said “it is clear that SACCOs have a lot to gain from

up with programmes aimed at employees’ capacity building

joining other micro-finance ins tu ons already members

as well as contribute to pushing financial educa on to the

of AMIR. AMIR has done a lot in advoca ng for the Micro-

next level,” Nzagahimana says.

finance sector and I believe Imirenge SACCOs can as well

On the other hand the voice of AMIR could be easily

benefit from that,” Kanimba said.

heard as it will, this me, be

SACCOs take

speaking on behalf of many

AMIR’s ini a ve has been greeted

ins tu ons, he adds.

with enthusiasm and passion that

by the large Imirenge SACCOs

understands well the crucial

community and many of them

role of the micro-finance

have expressed their keen interest

sector in the development

to join AMIR ‘as soon as possible’.

of this country, we want to

AMIR oﬃcials say mini-surveys

closely work with SACCOs to

that were carried a er each round-

find solu ons to challenges

table discussion revealed the

facing them and push for

ardent need to join the associa on

“As

ins tu on

na on growth,” Nzagahimana notes. “Our contribu on

on the part of SACCOs.

can be summed up in three categories: advocacy, capacity

Many of them have expressed interest in oﬃcially submi ng

building and financial educa on.”

their requests in a ma er of weeks or months.

Nzagahimana also says that with the ini a ve, SACCOs

Emmanuel Uwimana from SACCO Musha in Gisagara district

would share their experiences, best prac ces and savoir-

believes the membership could spur the growth of the

faire with other members to the benefit of the micro-

coopera ves through skills development, advocacy, policy

finance sector.

formula on and lobbying. “We are trying to solve some of the challenges we are facing

What others say...

but joining this associa on would be much more helpful,”

The members will also have a chance to come up with joint

Uwimana says.

and appropriate solu ons to the problems aﬀec ng the

“Though we are yet to acquire AMIR membership, we

development of the sector, he adds.

have benefi ed from several AMIR-organised capacity

Bri a Konitzer, SBFIC project coordinator for Rwanda and

building trainings which have been very beneficial to us.

Burundi, says she believes if Imirenge Savings and credits

I think by joining the associa on, we would benefit much

coopera ves become members of AMIR it would benefit

more,” Meg lde Mukeshimana, another SACCO oﬃcial who

the microfinance sector.

a ended one of the roundtables discussions in Huye district observes.

Rwanda Microfinance Magazine | No. 3| August 2014

TAKING VISION FINANCE COMPANY TO ANOTHER LEVE

Nathan Ross - Vision Finance Manager Nathan Ross is the new managing director of Vision

Nathan Ross: Am Ross, i have 16 years of experience

finance company-VFC, a microfinance ins tu ons

in microfinance sector and among them 11 in

subsidiary of World Vision approved as microfinance

Africa(Zambia, Tanzania, Malawi and Rwanda).I

ins tu ons in Rwanda since 2004. The microfinance

worked in Urwego opportunity bank in 2007 when it

ins tu on has got down and ups but it is me to

was struggling to start and later I le

evolve and reach another level, according to Ross who

Now am back to head Vision Finance Company.

for Tanzania and

believes his experience in the field will help him to make it. Below are excerpts of his interview with Jean

JD Hakuzimana: As MD, how would you describe

Damascene Hakuzimana of Rwanda Microfinance

Vision Finance Company?

Magazine.

Nathan Ross: VFC is a subsidiary of World Vision

JD Hakuzimana:

opera ng in Rwanda as other microfinance ins tu ons.

Briefly tell us about yourself and Microfinance Sector

We are currently serving more than 20.000 clients all

Rwanda Microfinance Magazine | No. 3| August 2014

EL, Vision of Nathan Ross, the NEW VFC MANAGER over the country and our living in a healthy and compe

primary target is to empower

sector. The financial literacy has

vulnerable children and their

progressed to an extent that any

families through access to

client may ask you the interest

financial services to eradicate

rate while reques ng for a loan.

poverty.

Microfinance

are

mainly

Ins tu ons

are

serving rural community by

serving underprivileged people...

following our ini al zones of

infrastructure have been taken to

interven ons named Area

rural area, there is much to say but

Developed Programs-ADP. In

in general the sector has evolved

brief we are giving opportunity to parents to provide

my friend.

their children with educa on and nutri on. JD Hakuzimana: Any new product to make Vision JD Hakuzimana: Vision Finance Company has been

Finance Company rocking?

failing to evolve and get to another level considering

Nathan Ross: Ah! My thinking is to take back VFC to

its age. How do you plan to handle this as an

its roots. We are going to serve on our focus. I am

experienced MD in microfinance?

basically going to improve our typical products, which

Nathan Ross: You are right to an extent. There has

are agriculture financing products, more savings

been a dri from mission and this has deprived VFC

products, educa on products. Indeed am looking

to move at its intended speed. However, as new

forward to design a product for women like; girls

MD I want to see things changing in various ways.

educa on considering the saying that Poverty has a

Experience tells me to bring new innova ons among

female face: economic crisis hits women hardest.

them being; biometrics for an easy banking. Am eying to increase the financial literacy among VFC clients

JD Hakuzimana: how do you advise AMIR, an

and I want to really work on financial inclusion through

associaƟon that VFC has registered as a member?

technology (mobile technology and web banking). Am

Nathan Ross: AMIR’s role should come primarily on

also planning to empower VFC branches across the

advoca ng for reforms to what we meet as challenges

country. “I have much in planning but trust me come

in our daily opera ons. I believe that AMIR s ll has a

back by end of 2015 to assess our progress even if you

long way to address mismanagement issues observed

are not my boss” Says Ross jokingly.

in member ins tu ons. We need to see Microfinance courses being injected as a professional career; this will

JD Hakuzimana: Mr. Ross, How do you judge

leave the upcoming genera on with an opportunity to

the development of the microfinance industry in

develop the microfinance Sector.

Rwanda?

JD Hakuzimana: Any addiƟon Mr. Ross?

Nathan Ross: Well...It is quite impressive but first of

Nathan Ross: Thank you for the interview I am happy

all I always keep in mind the closure of about nine

to see microfinance sector developing in Rwanda and

microfinance ins tu ons in 2006 and from there i talk

I thank the leadership in place which cares about the

about renaissance. From 2007 to now, things have

success of Rwanda every day.

changed, laws have been put in place, and we are

Rwanda Microfinance Magazine | No. 3| August 2014

Performance monitoring tool- PMT on the verge of s t reng thening Uganda and Rwanda microfinance indus t ries.

Pilot phase training on PMT Performance Monitoring Tool-PMT on the verge of

SACCOS so as to adapt it to Rwandan microfinance industry.

strengthening

This ini a ve emanates from SEEP’s advisory partnership

Uganda

and

Rwanda

microfinance

industries.

through their TechNet and large context of their responsible

It is early morning of 10th April 2014, in Fort portal district

finance program being implemented in 8 countries of

of Uganda, gazing the sunset at Ruwenzori Mountains a

Sub Saharan Africa including Rwanda. This visit was

natural border with Democra c Republic of Congo and

under transparency and informa on sharing component

Uganda.

of this program. Which started when SEEP’s Execu ve

With Peter Rwema and Jean Bap ste Hategekimana,

Director; Sharon d’Onofrio and the Director of associa on

Programs Director and Financial Inclusion and Performance

development, Bintou Ka Niang visited AMIR last year. They

Monitoring Senior Oﬃcer respec vely, staﬀ at Associa on

had advised AMIR to work on a new approach of data

of Microfinance Ins tu ons in Rwanda, we are all on one

mining, report analysis and informa on sharing for the

mission: understanding how the AMFIU’s 10 years old

microfinance industry so as to monitor performance of

Performance monitoring Tool-PMT works and experiencing

members in par cular and the sector at large.

its usage from urban to rural microfinance ins tu ons and

Mr. Wilson TWAMUHABWA, the chairman of AMFIU

Rwanda Microfinance Magazine | No. 3| August 2014 and Chief Execu ve Oﬃcer at UGAFODE, a microfinance

stock of their SACCO. “With PMT we easily produce SACCO’s

member to AMFIU advised AMIR team to adopt PMT due

health situa on report as well as any other required report

to the height it has taken AMFIU. According to AMFIU

by partners” He narrated.

chairman, PMT is a home grown solu on and it is likely

The PMT is installed to all five computers that KIJURA SACCO

to foster a regional integra on thus strengthening East

uses. The SACCO manager and the loan oﬃcer are the ones

African Microfinance Network spirit. “Am confident that if

trained to use PMT. The manager produces monthly reports

neighbors could adopt PMT, the microfinance regional data

either for the board of directors, partners or to AMFIU. “I

bank could become a reality in East Africa” He said.

easily click on a bu on and the system gives me the report to send” said the manager.

In Fort portal District, we are heading to KIJURA SACCO,

The leading team of KIJURA SACCO told AMIR’s staﬀ that

300 miles away from Kampala, the capital of Uganda to

they have, for several

learn how a small SACCO of 2,017 members uses PMT in

suggest areas of improvements in their SACCO. For example,

mes, exploited PMT reports to based on the informa on produced last year on nonperforming loans, the board of directors divided itself in four recovery commi ees; these commi ees have reduced the SACCOS NPL from 11% to 6%. Both the SACCO manager and loan oﬃcer explained that the PMT generates reports automa cally and help them to assess their performance by themselves. The assessment of the AMIR’s visi ng team concluded that the ini a on and installa on of PMT/S in AMIR will help to solve the problem of data

their daily opera ons and export data to their associa on-

that Rwanda microfinance industry has been lacking. It’s

AMFIU.

upon AMIR’s role to engage more stakeholders both from government and private partners to support this process.

PMT has graded KIJURA SACCO among best performer

AMIR plans to convene a mee ng for interested stakeholders

SACCOs in Uganda.

in data mining and mo vate them to support this ac vity.

In an ordinary conversa on, Mr. Vincent Kagwera, the

AMFIU team will come to present PMT/S and explain any

Chairman of Kijura SACCO told Rwandan team that their

ma er which may arise from partners.

SACCO is among best performers in Uganda a er adop ng

AMIR has started collabora ng with Rwanda Central Bank

PMT. He confessed that they started using it in 2009, as a

to look on how PMT format can be accommodated in the

provision from AMFIU and from that me they have taken

format used by microfinance ins tu ons while repor ng to



Rwanda Microfinance Magazine | No. 3| August 2014

central bank.

of communica on and advocacy at Associa on of Micro finance Ins tu on Rwanda, said.

What others say…

Meanwhile, AMIR has submi ed a code of conduct to the

As all AMIR members await the implementa on of the

Na onal Bank of Rwanda for analysis before a rac ng full

PMT Performance monitoring so ware applica on (PMT)

support from the bank.

due to be rolled out next month which is projected to

Peter Rwema, the Programmes director, at AMIR, said the

boost transparency and eﬃciency within micro finance

code will help the ins tu on align its financial ac vi es

ins tu ons. This is what some stake holders had to say

with all the stake holders including Central the bank.

about the ini a ve.

The code emphasizes the inspec on, enforcement and

Supported by the Na onal Bank of Rwanda, Access to Finance

compliance on relevant laws and regula ons as s pulated

Rwanda and Small Enterprise Educa on and Promo on

by the central bank; but it also promotes transparency and

Network SBFIC and SEEP, a US based organiza on, the

accountability with intent of ins lling a robust governance

applica on is expected assist credit ins tu ons technically

system in the sector,” Rwema said.

and financially.

The Micro finance sector has been striving to address the

According, Kevin Kavugizo, the Director of Microfinance

challenges related to clients’ over-indebtedness, lack of

supervision department at Central Bank, Rwanda’s micro

transparency, irresponsible pricing, poor customer care and

finance industry needs properly packaged data to be able

protec on, among others.

to thrive and drive economic development.

However, despite the challenges, sta s cs from the central

“And if PMT technology can solve the challenge, then

bank indicate that the sector has put forward a robust

Central Bank is fully in support of the ini a ve. We are

performance over the past five years when compared to

confident that the mechanism will give us more accurate

commercial banks.

data about the missing gaps and how they can be filled

Sta s cs for second quarter of 2014 indicate that Rwanda’s

for a more robust financial inclusion across the country,”

microfinance sector has performed excellently well

Kavugizo said.

registering return on asset and return on equity of 0.6%.

Judith Aguga, the Technical director of Access to Finance

Total liquid assets registered under this sector have since

Rwanda, said that the ins tu on is funding the ac vity to

increased from Rwf42.08billion in 2013 to more than

tackle the challenge of lack of accurate data on microfinance.

Rwf43.95billion during first quarter of 2014.

“We are looking forward to building a much stronger

This growth was mainly driven by the liquid assets and

microfinance data centre with support from Microfinance

gross loans which increased by 27.2% and 24.2%, moving

Ins tu on Rwanda to streamline the sector and facilitate

from Rwf33.1billion to Rwf42.1billion and Rwf59.2billion

financial interven ons in the sector”.

to Rwf73.5billion respec vely between 2012 and 2013,

It is important for any associa on to have data of its

according to Dr. Thomas Kigabo chief economist, Na onal

sector and we are encouraging this exercise to promote

Bank of Rwanda.

transparency of microfinance work and social performance

The Monetary Policy Commi ee (MPC) and Financial

related indicators” Said Bintou Ka Niang, the director of the

Stability Commi ee (FSC) at the Central Bank recently

associa on’s development at SEEP.

resolved to con nue strengthening the banks monitoring

The system is already being implemented in the neighboring

mechanism as the country’s economy recovers from slow

countries including Uganda.

growth registered during 2013.

Eﬀorts to import the system and train more data analysts

Jean Damascene HAKUZIMANA & Charlo e IRIGOGA

are ongoing, Jean Damascene Hakuzimana, the in charge

Senior Oﬃcer, Advocacy and Communica ons-(AMIR).

Rwanda Microfinance Magazine | No. 3| August 2014

From Subsis tence farming to large scale producer; than ks to CLECAM.

oopera ves

and

development

finance Formal credit and savings

ins tu ons have been around for decades, providing customers who were

tradi onally

neglected

commercial banks a way to obtain financial services through ins tu ons. In Rwanda microfinance is being used as a strategy for poverty allevia on in the country and a way of accomplishing Government goals in Vision 2020.” 2006 was a year of breakthrough for Prosper HABUMUREMYI, of Kabaya sector, Ngororero District in Western Province

Prosper in his irish potato garden

a farmer and large producer of Irish and

Today I have an investment in Irish potatoes worth

wheat.

Rwf 1500 000 that I grow on 1. 5 hectares and the

This materialized a er he got a loan from CLECAM a

harvest have considerably increased from 500kgs to

microfinance Ins tu on which lent him RWF250.000

12 tones. The benefit has also increased because I

for the start his life has never been the same again.

supply vendors in Rubavu district and some mes in

He says working with CLECAM improved his farming

other areas.

because prior to joining, he had a very small piece of

The 28 years old says all his possessions among which

land which was not produc ve enough for him to get

include a house and land are proceeds from farming

a good harvest to supply his clients and sustain of his

and working with CLECAM Gaseke and hopes to

produc on.

achieve more in future.

“There is nothing good like working with a great

Habumuremyi has 10 permanents workers, paid

coopera ve, which lends you money whenever you

between Rwf500 and Rwf1000 per day. In a near

need it. I had no idea about the kind of project I could

future, he plans to buy a new piece of land where he

do. But with CLECAM it has been possible for me to

will build a modern house and start poultry farming

be a self-suﬃcient farmer’’. He argues.

and also start tomato growing where he plans to begin

Habumuremyi says that apart from giving him a loan

with 500trees.

CLECAM advised him about how he could use the

Habumuremyi finally advices that, “Farming projects

money he had received to be able to pay back and

require innova on, moderniza on and ability to

see his farming project growing. “I can say that this

sustain them financially. And the quickest and easier

coopera ve came in at a me I needed it most.

way for farmers to acquire this is by partnering with

“In 2006, the first loan they oﬀered me was Rwf250.000

microfinance ins tu ons so as they are able support

which I used to buy another 2 hectare land where my

you financially and also advice you accordingly on how

wheat planta on is’’. Narrates Habumuremyi.

to mul ply your wealth.”

Rwanda Microfinance Magazine | No. 3| August 2014

TAKING AGRICULTURE TO THE NEX T LEV EL: COOPEC T WIZIGAMIRE

Mugemankiko shows off his wheat plantation By: Jean Pierre Bucyensenge Francois Mugemankiko, 42, cannot count the years he has spent lling farmland to earn a living. What he does remember though is that farming has been his bread earner since his childhood-having started to prac ce it during his teen-hood. The father of six recalls that his income was extremely li le to meet the needs of his family un l he decided to take his fate into his hands and embarked on a journey towards improved living condi ons. Four years ago, the la er a resident of Kabusekura village, Uwinkingi sector, in Nyamagabe district, south of the country, decided that a me had come to start prac cing agriculture on a large scale. But as he detailed his project, he realised that he was faced with serious challenges that paused a serious barrier to his dreams.

“I lacked enough money and land,” he recalls. A er days of reflec on and delibera ons, Mugemankiko sat down and wrote a project proposal that he took for funding to a local micro-finance ins tu on, Twizigamire Savings and Credits Coopera ve (be er known in the area as Coopec Twizigamire). A few days a er his project was submi ed, he got a posi ve response: his agriculture project had been approved and was to be funded. At first Mugemankiko was oﬀered a loan of a million Rwandan Francs (Rwf 1,000,000) that he used rent one hectare of land for RWF 300.000 so as to carry out his large-scale agriculture project. Today he s ll prac ces agriculture on the same piece land, where he grows; maize, wheat and potatoes alternately. In the past three years, Mugemankiko has secured Rwf800 000, 2million and 1.5 million respec vely in loan and hopes to secure another loan by the end of this year. “Whatever I have achieved was a result of working with this micro-finance ins tu on,” he says, as he works in his moderately extensive wheat planta on in Nyaruge village, dozens of kilometres from his home. “Always when I need money to invest, I put down a project and submit it. A er review and approval, we have an agreement on when to repay it back and the coopera ve oﬀers me a loan,” Mugemankiko explains. “It takes a mere fortnight and I have the money.” Life changer Established in 2009 and set in the centre of Nyamagabe

Rwanda Microfinance Magazine | No. 3| August 2014

town, south of the country, Coopec Twizigamire boasts repay the loans within the agreed period. of over 8400 members dispatched in the districts of Every day, Mugemankiko travels kilometres from his Nyamagabe, Nyaruguru and Huye. home village to supervise workers in his fields. For him The coopera ve operates on the to be able to travel as he wishes, basis of community-oriented he has bought a TVS motorcycle “Whatever I have achieved micro-finance ins tu on, that he rides every morning and was a result of working with offering short-term loans to evening to and from work. this Micro-fi nance ins tu on” its clients for a period ranging “I would advise other farmers to between three months to two Says Mugemankiko put aside their fears of acquiring years maximum depending on loans because whenever you the kind of credit requested. use them as planned and put the Many of the coop’s members are farmers and middlemoney to good use you will always get benefits,” he class businesspeople dealing mainly in the sale of advises. “It is crucial if we want to move from tradi onal chemical fer lisers to farmers or involved in retail sale to modern agriculture.” of various items. Climate-related challenges Currently over 129 million Rwandan francs offered as “Working with the coopera ve has been a very crucial loans to 164 members are being used to implement step in improving my business,” observes Vedaste several projects in its opera on zone, according to Mboneye, a fer liser seller in Nkumbure cell of Tare Terence Dusabimana, a loan officer with the saving sector. “Had I not worked with this coopera ve, I and credit coopera ve. wouldn’t have had the capacity to start the sale of Hundreds of millions of francs were also given out to fer lisers which was badly needed in this area.” members in the past years and have been successfully Officials and members of the coopera ve say the major paid back, he notes. challenges they are facing are related to climate change, “It is clear that the loans are changing the lives of many individuals,” Dusabimana says. “We are helping those who lacked capital to start income genera ng ac vi es to make their dreams of a be er life a reality.” “Both men and women have shown interest in working with us and that is playing an important role in changing the course of people’s lives,” Clo lde Kagoyire, also a loan officer, notes. “The most interes ng thing is that people are having opportuni es to access funds to invest which is s mula ng life transforma on,” she adds, no ng that almost all their clients have proved able to

Rwanda Microfinance Magazine | No. 3| August 2014

which some mes aﬀects their agricultural produc on and has nega ve impacts on their capacity to service back their loans. “But when that occurs, we approach the coopera ve and discuss new terms and an extended period to pay the loan,” says farmer Mugemankiko. “We always reach an amicable solu on.”

Via teur Mutoni: Scaling the height of wealth When Viateur Mutoni grew up, he was introduced to farming as his parents were prac cing tradi onal agriculture. For years, he lived-rather survived- on subsistence agriculture, producing food to only feed his family. But as he matured, the resident of Shaba cell in Kitabi sector decided to change the course of his life and improve the life of his family. So, about three years ago he joined Coopec Twizigamire and requested for a loan of Rwf300 000 which he used to start a low-scale chicken rearing project. He would later secure Rwf500 000 and one million in the following two years-gaining ability to expand his chicken project and to start a new venture into growing tamarillo (tree tomato) fruits. Today, both his projects have started earning him revenues which he says is contribu ng to improving his life. The man, who defines himself as a ‘middle-class farmer’, says he is looking forward to expand his chicken project from the current 120 egg-layers to at least 400 by the end of this year while he also hopes to expand his tree tomato planta ons

and start growing other fruits and vegetables to further diversify the source of his income. “As my ac vi es con nue to expand, my financial capacity will also keep improving,” he says. “And that will require me to keep sinking in more money to make sure my projects run as properly as possible. For me to get that money, I will con nue working with the savings and credit coopera ve.” “Working with micro-finance ins tu ons give us the ability to implement projects we wouldn’t be able to carry out on our own,” says Mutoni. “There are those who fear to work with financial ins tu ons on pretext that they might not be able to service back the money, but what you need to do is to properly analyse your project, your possible market and all variables that might aﬀect it and then execute it properly,” he advises. Mutoni says with his investment, he has managed to buy a ‘rela vely big tree planta on’ which he says “is an everlas ng reminder of how beneficial working with micro-finance ins tu ons is.” “I am now be er oﬀ and the living condi ons of my family have improved,” he says, nothing that he now has the capacity to provide for their needs.

Poultry one of Mutoni’s successful projects

Rwanda Microfinance Magazine | No. 3| August 2014

MAKING THE LEAP… AMIR AND FINANCIAL INCLUSION IN RWANDA.

ins tu ons and the sector at large that enable them to work professionally and contribute to poverty

inancial inclusion at

mes known as Inclusive

reduc on in a sustainable manner.

Financing can be defined as the delivery of

financial services at aﬀordable costs to sec ons of

Microfinance is one of the important sub-sectors

disadvantaged and low-income segments of society,

in achieving vision 2020 goals. It acts as a catalyst

in contrast to financial exclusion where those services

contribu ng towards transforming Rwandan economy

are not available or aﬀordable. Financial services are

into middle income country. It plays a crucial role in

those economic services provided by the finance

changing the country’s economy from subsistence

industry which among others include savings, loans,

agriculture to knowledge based society through

credit union, insurance credit cards, and financial

various financial products and services, financial

management.

literacy and educa on programs. As a result there is improved savings which cul vates private investments.

United Na ons’ millennium development goal

The government has set a target of 90 percent financial

number one is poverty eradica on which should be

inclusion by 2020 and the evidence of progress toward

achieved before the close of 2015. In Rwanda the

this goal is everywhere: Adver sements for mobile-

government aims at doing all that is possible to see

money products are painted and plastered onto

poverty allevia on be achieved through all means by

almost every available surface and, if you know what

2020. The ul mate objec ve of Rwanda’s long term

to look for, it doesn’t take long to spot an Umurenge

development plan is to transform the country into

Savings and Credit Coopera ve (Umurenge SACCO) –

a middle-income country and an economic trade,

Rwanda’s signature financial inclusion ini a ve.

communica on and financial hub by the year 2020. The government therefore has partnered with various

Six years ago, the 2008 FinScope survey found that

ins tu ons including among others Associa on for

that 47 percent of Rwandan adults used some type of

Microfinance Ins tu ons in Rwanda an umbrella

financial product or service, but just 21 percent were

organiza on that puts together all microfinance

par cipa ng in the formal financial sector, which was

ins tu ons in the country in the struggle for poverty

at the me made up mostly of banks but which also

allevia on.

included a handful of microfinance ins tu ons and SACCO.

AMIR is the only professional microfinance associa on in Rwanda with currently 62 members. It is guided

AMIR for six years has seen massive progress and

by the vision of becoming a strong and eﬃcient

contribu on to the achievement of vision 2020

organiza on that contributes to the development of

and financial inclusion in par cular through various

the microfinance industry through the promo on of

ac vi es and programs; these are some of AMIR’s

transparent management systems in MFIs, innova ve

contribu on to the achievement of financial inclusion

and market-led financial services and products.

in Rwanda.

Therefore to fulfill this vision, AMIR has the mission

of oﬀering diversified services to the micro finance

Promo on of informal inclusion mechanisms and ini a ves & Bring Social Performance

Rwanda Microfinance Magazine | No. 3| August 2014 Management

into

the

mainstream

Rwandese microfinance

governed MFIs ensure a steady growth in financial inclusion & Client oriented product

AMIR - SBFIC have enormously contributed in

development and diversifica on

financial eduac on to equip Rwandans with the necessary knowledge. So far 29,000 children

By suppor ng agri-lending and micro leasing AMIR

have opend savings accounts with MFIs/

has contributed in diversifying products that MFIs

SACCOs. Those children saved an amount of

oďŹ&#x20AC;er thus to met the needs and protec on of

Rwf 140,000,000 in individual saving accounts.

clients. Marke ng strategies developed to MFIs have contributed in

products

refinement, development a

diversification for target new segments which contributes

areas of product development and

inclusive

finance

N a t i o n a l Micro

finance

Implementation S t rate g y. (NMPIS). AMIR - AFLATOUN

trained 370 teachers in

much in 2013 in the

child social and financial educa on curriculum:

professionalisa on of the microfinance sector by

This is also a contribu on to youth inclusion in

advising MFIs to report their data regulary to the

financial services.

central bank and to Mix market. This has helped in

By Informal inclusion promo on, AMIR has partned

AMIR also has played

increasing transparence and the visibility of Rwanda

with CARE Interna onal to scale up Village

microfinance sector.

Savings Loan Associa on (VSLA) projects

In a nut shell therefore financial Inclusion is an

within 3 microfinance ins tu ons in 2013. The

interna onal public strategy that is being campaigned

monitoring report has shown a good working

so as to see the majority popula on across the world

rela on between VSLAs and Microfinance

who are the poor households not only survive on a

Ins tu ons especially in increasing the VSLA

dollar per day but also be able to mul ply it and have

lending capital.

more to save and develop their livelihood.

Increasingly

eďŹ&#x192;cient

and

adequately

Irigoga Charlo e

Rwanda Microfinance Magazine | No. 3| August 2014