2.6: MICROFINANCE INSTITUTIONS IN RWANDA
Microfinance institutions in Rwanda are operating under the
law no 06/99 of 18 June 1999 relating to regulations governing banks
and other financial institutions. The Rwanda central bank and ministry of
finance and economic planning supervise activities of all MFIs and COOPECs in
Rwanda. Microfinance institutions are grouped in the RMF. The microfinance
sector in Rwanda comprises the UBPR, credit, savings clubs, insurance
companies, tontines and other informal system. Therefore, they are formal
microfinance system, which operates under license and informal microfinance
system, which is generally observed between individual groups that are not
known by the authority.
In 2002, the BNR adopted the instruction no 6/2002
regulating microfinance activities in Rwanda. Throughout this instruction, BNR
seeks to develop microfinance programs in Rwandan society as follows; « so
as to insure to the whole population secure to financial local community- based
services so as to develop sound and professional MFIs and, to structure
accordingly the microfinance sector in Rwanda»(BNR 2002;1).
In Rwanda, there are a growing number of savings and credit
cooperatives whose objective is highly valuable to the Rwandan people whose
income is still low. These cooperatives are set up to serve the population
through provision of small loans whose interest is not too high. The wide
spread savings and credit cooperatives among others are mentioned in the
introductory part.
Numerous Grameen-like institutions in form of savings and loan
cooperatives or COOPECs have sprouted. All these and many others operate under
the umbrella of the Rwandan microfinance forum (RMF). The RMF is platform of
organizations intervening in microfinance in Rwanda. It is the centre for
exchange and a reflection on microfinance that was created in 1998. It's
formerly begun operating in May 2002 with a primary objective of
professionalizing and institutionalizing the microfinance sector in Rwanda. The
national bank of Rwanda is also very much involved in the regulation of
microfinance institutions.
The government of Rwanda has
developed its poverty reduction strategy through extensive national
consultation. The resultant Poverty Reduction Strategy paper (PRSP) was
endorsed by the Boards of the World Bank and international monetary fund on
August 12. 2002. The actions outlined in the PRSP fit within the overall vision
of Rwanda's development as set out in vision 2020, which identifies the key
objective that Rwanda needs to attain in order to become a middle-income
country by 2020. Throughout the PRSP, microfinance is a key element for the
achievement of the government of Rwanda's objectives
Microfinance institutions operation in Rwanda can be traced in
the activities of Banque populaire and Duterimbere all of 1975 and 1987
respectively. Banque Populaire was formed through the request of Switzerland as
micro project to Rwandan government. Duterimbere was established as an
affiliated of women world working (UNDP 1997). Duterimbere provides loans to
microfinance and small-scale enterprises that are owned by women. It has
established a cooperative institution (COOPEDU) to coordinate loan programs and
savings.
Microfinance was created in response to the need of poor who
require small loan (micro-credit), however time; microfinance has come to
include a wide range of services ranging from credit extension, saving
mobilization.
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