rwanda microfinance magazine issue 3

Rwanda Microfi nance Magazine | No. 3| August 2014 3

From 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 Aff airs Manager of Rabobank Oosterschelde, the account manager for small and medium enterprises (SMEs), the fi nancial 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 fi nancing 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 fi nanced through a microlease arrangement.The Rabobank visitors said they were impressed with the growth of the ins tu on, and the way Umutanguha eff ec 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 aff airs, and fi nally 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 fi nancial support from AFR (Access to Finance Rwanda).

Smallholder fi nancing is being promoted among Rwandan MFIs through a focused training and coaching programme funded by Rabobank and Terrafi na. Agricultural fi nance, 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 refi nancing by the Rabobank Founda on.

Frank Bakx

Rabobank Foundation in Rwanda Contents

Rwanda Microfi nance Magazine

PublisherAssociation of Microfi nance Institutions in Rwanda

Editor in ChiefJean Damascène Hakuzimana

EditorIrigoga Charlotte

AdvisorsPeter RwemaThomas KonitzerBritta Konitzer

ContributorsJean Pierre BucyensengeDady Sadiki RubanguraUmutoni LaetitiaIrigoga Charlotte

Editorial P.2

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

Refi nancing for Microfi nance Ins tu on in Rwanda P.9

Youth – an opportunity to extend fi nancial 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 Microfi nance Magazine | No. 3| August 20144


Visit any upcountry school and you will get

amazed at how much the pupils/students

understand that they have to save the li le they

receive from their parents. They have even gone an

extra step and formed savings clubs.

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

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

millionaire,” said Zawadi Mugurwanyana, a senior fi ve

student at Ecole Secondaire Rusumo, Kirehe District.

The teen has so far managed to save Rwf1000 with

a local micro fi nance ins tu on (Umurenge Sacco).

Mugurwanyana started saving last month a er

undergoing training on saving and being helped to

open an account by her school.

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

of her achievement.

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

parents because this amount (Rwf1, 000) would cover

it,” she said.

But Mugurwanyana has no inten ons of spending

all her money on school materials. Her objec ve

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

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

secondary school, the goat should have given birth.

I will eventually start a goat farming project,” she

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

Kayonza, Eastern Province.

Her colleague, Gaspard Munyampundu, who is in

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

says his dream is to start modern farming.

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

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

his parents raise Rwf 80,000 per month from selling

bananas in Kirehe district.

Munyampundu is op mis c that once he adopts

SAVINGS IN SCHOOLS GAIN MOMENTUM

Best saving pupils receive awards


modern farming methods and keeps saving, he will be

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

childhood.

This savings culture is not unique to secondary schools

but also primary schools are involved.

Edouard Sibomana, the Director of Rubengera I

Primary School in Karongi district, Western Province

said his pupils grow vegetables in the school garden

and sell them to their parents.

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

bigger things are in the pipeline,” he said.

Rubengera School which started this saving project

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

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

na onal exams but his parents could not aff ord the

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

it a er three weeks.

“This bright child told the parents that he was going

to withdraw the money from his account on condi on

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

Sibomana explained.

How it started

FINANCIAL educa on to school children is a founda on

for inculca ng fi nancial values and the savings culture.

When Rwandan children are exposed to these values,

they grow up to become advocates of the savings

culture which is s ll very poor in the country.

The ongoing fi nancial literacy campaign in schools by

the Associa on of Microfi nance Ins tu ons in Rwanda

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

Fund in the Ministry of educa on, Savings Bank

Founda on for Interna onal Coopera on-SBFIC and

other partners started some four years back. It came

into force to tackle the habitude of Rwandans whose

culture of savings is not yet developed according to

sta s cs.

Providing fi nancial educa on to young people means

that in the future the country will have a genera on

of ci zens with great entrepreneurial minds and

strong fi nancial discipline. The children have started

acquiring knowledge and skills about small enterprise

crea on and savings. AMIR, DFID/MINEDUCA and

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

been a ended by more than 500 teachers who in turn

will sow fi nancial educa on seed. Through children

savings, a deposit of more that 140millions has been

deposited and more than 30.000 accounts were

opened through this project.

Financial ins tu ons are confi dent that the young

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

Florent Majyambere, the Managing Director of

Uniclecam Wisigara Coopera ve, an umbrella of

fi nancial Ins tu ons in Rubavu district, has 6,000

pupils and students with over Rwf19m in savings.

Why save

Ngirinshu E enne says the main objec ve of the

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

li le pocket money and also understand that they

have the poten al to contribute to their country’s

development.

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

of our pocket money, we will not only buy doughnuts

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

Mugurwanyana.

The children, however, are not taught to save money

only. Mugurwanyana says they are also taught to avoid

wastage. For instance he says he cannot buy a new

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

another class.

“We have learnt that whatever you preserve and

take good care of discourages you from spending

unnecessarily,” said Mugurwanyana.

Bri a Konitzer


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 aff ord 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 fi rst 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

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.

Nyirabatunzi says CLECAM made her feel confi dent 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 microfi nance

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

CLECAM PULLED ME OUT OF SHACKLES OF POVERTY TO A GALLANT WOMAN WITH STATUS AND VALUE.

Anastasia shows off some of her produce


The Rwandan Na onal Microfi nance Policy emphasizes the role that the microfi nance

sector can play in the a ainment of the goals of Government’s Vision 2020 programme, which consists of transforming Rwanda from a low-income into a medium-income country with a dynamic, diversifi ed and compe ve economy. Moreover, the Na onal Economic Development and Poverty Reduc on Strategy (EDPRS II) aims to bring the number of the people below the poverty line to less than 30% by 2018.To accomplish the EDPRS II aspira ons, Rwanda needs a robust and suppor ve fi nancial sector with suitable ins tu onal and regulatory framework, eff ec ve and effi cient fi nancial intermedia on and adequate provision of credit to the economy. Microfi nance is seen as an important instrument in the implementa on of the EDPRS II by helping to build a solid business community of entrepreneurs focused

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

The Rwandan microfi nance sector con nues to show strong growth with assets increasing by 27.4% between December 2012 and December 2013, rising from RWF 101 billion to RWF 128.7 billion. The SACCOs are equally pos ng strong results with deposits growing by 31% in 2013. Despite the strong growth, the microfi nance sector is faced with numerous challenges which include high concentra on of services in urban and semi-urban areas; inadequate staff skills; lack of or underdeveloped IT and informa on systems; limited fi nancial management and accoun ng; and lack of fi nancing to fund por olio growth. These challenges are likely to hold back microfi nance from performing its role in contribu ng to employment crea on and sustainable poverty reduc on.

Refinancing for Microfinance Insti tutions in Rwanda


In the frame of its fi nancial sector ini a ves, Access to Finance Rwanda (AFR) recently commissioned a study to analyze reasons for, and to es mate the size of the refi nancing gap for microfi nance ins tu ons (MFIs) and SACCOs in Rwanda. All MFIs par cipa ng in the study men oned a lack of access to external debt funding at a rac ve rates and fl exible collateral requirements as a cri cal bo leneck in scaling up the loan por olio and realizing a deeper outreach into rural areas. Commercial banks, which should naturally be the fi rst point of call are not adequately lending to MFIs due to the perceived high risk profi le of MFIs. For example, the average short-term nominal interest rate on commercial loans for the microfi nance sector currently ranges between 18% - 19% p.a. These kinds of rates are una rac ve to most MFIs considering that they have to take into account their rela vely high opera onal costs while determining the interest rate to the end borrowers. Most MFIs also face challenges in accessing interna onal refi nancing due to the o en risk-averse nature of interna onal investors that prefer inves ng in larger and more stable MFIs.

Suffi cient funding is a signifi cant constraint to por olio growth and it seems to be holding back improved access to microfi nance services in general. To help address this market failure in the refi nancing market, AFR with support from the German Development Bank KfW will establish the Microfi nance Challenge Fund which will provide customized and comprehensive package of TA support complemented by refi nancing to select MFIs. To be selected, the MFI must demonstrate credible promise for innova on, sustainable growth and rural outreach as well as a track record of consistent ins tu onal improvement. AFR’s inten on is to groom these ins tu ons to become future champions of pro-poor micro-fi nancial services that will in due course have the capacity and profi le that would enable them to tap into conven onal microfi nance funding from commercial banks and other investors in microfi nance. The Challenge Fund campaign has already been launched.

Ivan MURENZI/AFR

The youth (aged 14-35 years) cons tute

approximately 40% of the total popula on in

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

sta s cs from the 2012 FinScope Survey show that

the youth is among the most fi nancially excluded

popula on groups in Rwanda and that alarmingly

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

fi nancial services at all.

Several ini a ves aimed at empowering

youth to be economically ac ve ci zens

are currently being implemented by

both government and non-governmental

ins tu ons. By suppor ng youth

entrepreneurship through provision of

market-relevant skills, work readiness and links to the

employment and self-employment job market and by

providing resources, a posi ve environment is created

for development of new economic opportuni es and

sustainable livelihoods.

As youth start and grow their businesses, they are

in dire need of appropriate and aff ordable fi nancial

services to sustain and develop their livelihoods.

However, as youth are considered high-risk clients

and because of lack of collateral,

Financial Ins tu ons (banks,

MFIs and SACCOs) in Rwanda

barely off er any services targeted

at this popula on group.

Youth – an opportunity to ex tend financial services


To promote access to fi nancial 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 fi nancial services:

1. To increase youths’ access to appropriate, demand driven fi nancial services

2. To build up fi nancial service provider capacity to provide comprehensive youth services, including

providers of fi nancial and non-fi nancial services, as well as related policy makers;

3. To create and mobilise knowledge related

to youth fi nancial and non-fi nancial

services in Rwanda.

Although not all youth are economically

ac ve, a majority of them have fi nancial

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 fi nancial markets

through accessing a saving’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

become familiar with FIs and demonstrate their income

fl ows for considera on for future loans if needed.

Some youth in motorcyle riding business

Ivan MURENZI/AFR


AMIR’s Quest to bring Imirenge SACCOs onboard

By Jean Pierre Bucyensenge

When the Rwandan Government mulled over the idea

of establishing community-based savings and credits

coopera ves which were to be managed and owned by

ci zens themselves under the support and guidance of

fi nancial experts, it wanted to increase access to fi nancial

services by ci zens, especially those in rural areas.

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

commercial banks are more concentrated in urban areas

and less present in rural areas, according to offi cials.

A research conducted in 2008 established that only 21

per cent of the Rwandans were working with fi nancial

ins tu ons. Subsequently, the government devised ways

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

savings and credits coopera ves (Umurenge SACCOs) that

same year.

Umurenge SACCO is a community microfi nance programme

which seeks to strengthen the fi nancial sector through

enabling the general popula on to have easy access to

fi nance and related services.

There are 416 sector-based SACCOs in total spread across

all the districts in the country.

However as new ins tu ons and despite the many steps

they have gone in building successful community-oriented

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

challenges in their daily ac vi es which are aff ec ng their

businesses and their capacity to provide high-end services

to their members.

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

Finance Ins tu ons in Rwanda (AMIR) wants to help the

coopera ves look up for ways of solving the challenges they

are s ll facing.

AMIR, which already brings together 62 micro-fi nance

ins tu ons across the country, wants the SACCOs to

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

towards building far stronger ins tu ons, according to the

organisa on’s offi cials.

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

tables mee ngs bringing together SACCO managers to

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

solu ons against them and benefi ts of joining the micro-

fi nance associa on.

During these roundtables, Imirenge SACCOs managers are

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

to develop the micro-fi nance sector in the country, which

services it is rendering to micro-fi nance ins tu ons and


“I believe joining AMIR would help tackle some of the

SACCOs challenges. They have many needs in terms of

capacity building, fi nancial educa on, advocacy and

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

lobbying for them and which is rendering services for them,”

Konitzer says. She adds that “I am strongly convinced that

AMIR can really contribute and add value to those Imirenge

SACCOs.”

In an interview with this Magazine, the minister of Trade

and Industry Francois Kanimba welcomed the move and

said SACCOs are set to benefi t from it.

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

joining other micro-fi nance ins tu ons already members

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

fi nance sector and I believe Imirenge SACCOs can as well

benefi t from that,” Kanimba said.

SACCOs take

AMIR’s ini a ve has been greeted

with enthusiasm and passion

by the large Imirenge SACCOs

community and many of them

have expressed their keen interest

to join AMIR ‘as soon as possible’.

AMIR offi cials say mini-surveys

that were carried a er each round-

table discussion revealed the

ardent need to join the associa on

on the part of SACCOs.

Many of them have expressed interest in offi cially submi ng

their requests in a ma er of weeks or months.

Emmanuel Uwimana from SACCO Musha in Gisagara district

believes the membership could spur the growth of the

coopera ves through skills development, advocacy, policy

formula on and lobbying.

“We are trying to solve some of the challenges we are facing

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

Uwimana says.

“Though we are yet to acquire AMIR membership, we

have benefi ed from several AMIR-organised capacity

building trainings which have been very benefi cial to us.

I think by joining the associa on, we would benefi t much

more,” Meg lde Mukeshimana, another SACCO offi cial who

a ended one of the roundtables discussions in Huye district

observes.

much more informa on with the aim of bringing them on

board.

These roundtables were a success thanks to the fi nancial

support from the Savings Banks Founda on for Interna onal

Coopera on (SBFIC).

Interes ng move

According to Jean Marie Vianney Nzagahimana, AMIR’s

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

microfi nance associa on is set to benefi t both SACCOs and

AMIR.

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

up with programmes aimed at employees’ capacity building

as well as contribute to pushing fi nancial educa on to the

next level,” Nzagahimana says.

On the other hand the voice of AMIR could be easily

heard as it will, this me, be

speaking on behalf of many

ins tu ons, he adds.

“As an ins tu on that

understands well the crucial

role of the micro-fi nance

sector in the development

of this country, we want to

closely work with SACCOs to

fi nd solu ons to challenges

facing them and push for

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

can be summed up in three categories: advocacy, capacity

building and fi nancial educa on.”

Nzagahimana also says that with the ini a ve, SACCOs

would share their experiences, best prac ces and savoir-

faire with other members to the benefi t of the micro-

fi nance sector.

What others say...

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

and appropriate solu ons to the problems aff ec ng the

development of the sector, he adds.

Bri a Konitzer, SBFIC project coordinator for Rwanda and

Burundi, says she believes if Imirenge Savings and credits

coopera ves become members of AMIR it would benefi t

the microfi nance sector.


TAKING VISION FINANCE COMPANY TO ANOTHER LEVE

Nathan Ross is the new managing director of Vision fi nance company-VFC, a microfi nance ins tu ons subsidiary of World Vision approved as microfi nance ins tu ons in Rwanda since 2004. The microfi nance ins tu on has got down and ups but it is me to evolve and reach another level, according to Ross who believes his experience in the fi eld will help him to make it. Below are excerpts of his interview with Jean Damascene Hakuzimana of Rwanda Microfi nance Magazine.JD Hakuzimana: Briefl y tell us about yourself and Microfi nance Sector

Nathan Ross: Am Ross, i have 16 years of experience in microfi nance sector and among them 11 in Africa(Zambia, Tanzania, Malawi and Rwanda).I worked in Urwego opportunity bank in 2007 when it was struggling to start and later I le for Tanzania and Now am back to head Vision Finance Company.

JD Hakuzimana: As MD, how would you describe Vision Finance Company?Nathan Ross: VFC is a subsidiary of World Vision opera ng in Rwanda as other microfi nance ins tu ons. We are currently serving more than 20.000 clients all

Nathan Ross - Vision Finance Manager


EL, Vision of Nathan Ross, the NEW VFC MANAGERover the country and our primary target is to empower vulnerable children and their families through access to fi nancial services to eradicate poverty. We are mainly serving rural community by following our ini al zones of interven ons named Area Developed Programs-ADP. In brief we are giving opportunity to parents to provide their children with educa on and nutri on.

JD Hakuzimana: Vision Finance Company has been failing to evolve and get to another level considering its age. How do you plan to handle this as an experienced MD in microfi nance?Nathan Ross: You are right to an extent. There has been a dri from mission and this has deprived VFC to move at its intended speed. However, as new MD I want to see things changing in various ways. Experience tells me to bring new innova ons among them being; biometrics for an easy banking. Am eying to increase the fi nancial literacy among VFC clients and I want to really work on fi nancial inclusion through technology (mobile technology and web banking). Am also planning to empower VFC branches across the country. “I have much in planning but trust me come back by end of 2015 to assess our progress even if you are not my boss” Says Ross jokingly.

JD Hakuzimana: Mr. Ross, How do you judge the development of the microfi nance industry in Rwanda?Nathan Ross: Well...It is quite impressive but fi rst of all I always keep in mind the closure of about nine microfi nance ins tu ons in 2006 and from there i talk about renaissance. From 2007 to now, things have changed, laws have been put in place, and we are

living in a healthy and compe ve sector. The fi nancial literacy has progressed to an extent that any client may ask you the interest rate while reques ng for a loan. Microfi nance Ins tu ons are serving underprivileged people...infrastructure have been taken to rural area, there is much to say but in general the sector has evolved

my friend.

JD Hakuzimana: Any new product to make Vision Finance Company rocking?Nathan Ross: Ah! My thinking is to take back VFC to its roots. We are going to serve on our focus. I am basically going to improve our typical products, which are agriculture fi nancing products, more savings products, educa on products. Indeed am looking forward to design a product for women like; girls educa on considering the saying that Poverty has a female face: economic crisis hits women hardest.

JD Hakuzimana: how do you advise AMIR, an associa on that VFC has registered as a member?Nathan Ross: AMIR’s role should come primarily on advoca ng for reforms to what we meet as challenges in our daily opera ons. I believe that AMIR s ll has a long way to address mismanagement issues observed in member ins tu ons. We need to see Microfi nance courses being injected as a professional career; this will leave the upcoming genera on with an opportunity to develop the microfi nance Sector. JD Hakuzimana: Any addi on Mr. Ross?Nathan Ross: Thank you for the interview I am happy to see microfi nance sector developing in Rwanda and I thank the leadership in place which cares about the success of Rwanda every day.


Performance Monitoring Tool-PMT on the verge of

strengthening Uganda and Rwanda microfi nance

industries.

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

of Uganda, gazing the sunset at Ruwenzori Mountains a

natural border with Democra c Republic of Congo and

Uganda.

With Peter Rwema and Jean Bap ste Hategekimana,

Programs Director and Financial Inclusion and Performance

Monitoring Senior Offi cer respec vely, staff at Associa on

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

mission: understanding how the AMFIU’s 10 years old

Performance monitoring Tool-PMT works and experiencing

its usage from urban to rural microfi nance ins tu ons and

SACCOS so as to adapt it to Rwandan microfi nance industry.

This ini a ve emanates from SEEP’s advisory partnership

through their TechNet and large context of their responsible

fi nance program being implemented in 8 countries of

Sub Saharan Africa including Rwanda. This visit was

under transparency and informa on sharing component

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

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

development, Bintou Ka Niang visited AMIR last year. They

had advised AMIR to work on a new approach of data

mining, report analysis and informa on sharing for the

microfi nance industry so as to monitor performance of

members in par cular and the sector at large.

Mr. Wilson TWAMUHABWA, the chairman of AMFIU

Performance monitoring tool-PMT on the verge of s t rengthening Uganda and Rwanda microfinance indust ries.

Pilot phase training on PMT


and Chief Execu ve Offi cer at UGAFODE, a microfi nance

member to AMFIU advised AMIR team to adopt PMT due

to the height it has taken AMFIU. According to AMFIU

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

to foster a regional integra on thus strengthening East

African Microfi nance Network spirit. “Am confi dent that if

neighbors could adopt PMT, the microfi nance regional data

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

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

300 miles away from Kampala, the capital of Uganda to

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

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

AMFIU.

PMT has graded KIJURA SACCO among best performer

SACCOs in Uganda.

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

Chairman of Kijura SACCO told Rwandan team that their

SACCO is among best performers in Uganda a er adop ng

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

provision from AMFIU and from that me they have taken

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

health situa on report as well as any other required report

by partners” He narrated.

The PMT is installed to all fi ve computers that KIJURA SACCO

uses. The SACCO manager and the loan offi cer are the ones

trained to use PMT. The manager produces monthly reports

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

easily click on a bu on and the system gives me the report

to send” said the manager.

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

they have, for several mes, exploited PMT reports to

suggest areas of improvements in their SACCO. For example,

based on the informa on

produced last year on non-

performing 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 offi cer 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

that Rwanda microfi nance industry has been lacking. It’s

upon AMIR’s role to engage more stakeholders both from

government and private partners to support this process.

AMIR plans to convene a mee ng for interested stakeholders

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

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

ma er which may arise from partners.

AMIR has started collabora ng with Rwanda Central Bank

to look on how PMT format can be accommodated in the

format used by microfi nance ins tu ons while repor ng to


central bank.

What others say…

As all AMIR members await the implementa on of the

PMT Performance monitoring so ware applica on (PMT)

due to be rolled out next month which is projected to

boost transparency and effi ciency within micro fi nance

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

about the ini a ve.

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

Rwanda and Small Enterprise Educa on and Promo on

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

applica on is expected assist credit ins tu ons technically

and fi nancially.

According, Kevin Kavugizo, the Director of Microfi nance

supervision department at Central Bank, Rwanda’s micro

fi nance industry needs properly packaged data to be able

to thrive and drive economic development.

“And if PMT technology can solve the challenge, then

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

confi dent that the mechanism will give us more accurate

data about the missing gaps and how they can be fi lled

for a more robust fi nancial inclusion across the country,”

Kavugizo said.

Judith Aguga, the Technical director of Access to Finance

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

tackle the challenge of lack of accurate data on microfi nance.

“We are looking forward to building a much stronger

microfi nance data centre with support from Microfi nance

Ins tu on Rwanda to streamline the sector and facilitate

fi nancial interven ons in the sector”.

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

sector and we are encouraging this exercise to promote

transparency of microfi nance work and social performance

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

associa on’s development at SEEP.

The system is already being implemented in the neighboring

countries including Uganda.

Eff orts to import the system and train more data analysts

are ongoing, Jean Damascene Hakuzimana, the in charge

of communica on and advocacy at Associa on of Micro

fi nance Ins tu on Rwanda, said.

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

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

support from the bank.

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

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

with all the stake holders including Central the bank.

The code emphasizes the inspec on, enforcement and

compliance on relevant laws and regula ons as s pulated

by the central bank; but it also promotes transparency and

accountability with intent of ins lling a robust governance

system in the sector,” Rwema said.

The Micro fi nance sector has been striving to address the

challenges related to clients’ over-indebtedness, lack of

transparency, irresponsible pricing, poor customer care and

protec on, among others.

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

bank indicate that the sector has put forward a robust

performance over the past fi ve years when compared to

commercial banks.

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

microfi nance sector has performed excellently well

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

Total liquid assets registered under this sector have since

increased from Rwf42.08billion in 2013 to more than

Rwf43.95billion during fi rst quarter of 2014.

This growth was mainly driven by the liquid assets and

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

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

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

according to Dr. Thomas Kigabo chief economist, Na onal

Bank of Rwanda.

The Monetary Policy Commi ee (MPC) and Financial

Stability Commi ee (FSC) at the Central Bank recently

resolved to con nue strengthening the banks monitoring

mechanism as the country’s economy recovers from slow

growth registered during 2013.

Jean Damascene HAKUZIMANA & Charlo e IRIGOGA

Senior Offi cer, Advocacy and Communica ons-(AMIR).


Coopera ves and development fi nance Formal credit and savings

ins tu ons have been around for decades, providing customers who were tradi onally neglected by commercial banks a way to obtain fi nancial services through ins tu ons. In Rwanda microfi nance 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 a farmer and large producer of Irish and wheat.This materialized a er he got a loan from CLECAM a microfi nance Ins tu on which lent him RWF250.000 for the start his life has never been the same again.He says working with CLECAM improved his farming because prior to joining, he had a very small piece of land which was not produc ve enough for him to get a good harvest to supply his clients and sustain of his produc on.“There is nothing good like working with a great coopera ve, which lends you money whenever you need it. I had no idea about the kind of project I could do. But with CLECAM it has been possible for me to be a self-suffi cient farmer’’. He argues.Habumuremyi says that apart from giving him a loan CLECAM advised him about how he could use the money he had received to be able to pay back and see his farming project growing. “I can say that this coopera ve came in at a me I needed it most. “In 2006, the fi rst loan they off ered me was Rwf250.000 which I used to buy another 2 hectare land where my wheat planta on is’’. Narrates Habumuremyi.

Today I have an investment in Irish potatoes worth Rwf 1500 000 that I grow on 1. 5 hectares and the harvest have considerably increased from 500kgs to 12 tones. The benefi t has also increased because I supply vendors in Rubavu district and some mes in other areas. The 28 years old says all his possessions among which include a house and land are proceeds from farming and working with CLECAM Gaseke and hopes to achieve more in future.Habumuremyi has 10 permanents workers, paid between Rwf500 and Rwf1000 per day. In a near future, he plans to buy a new piece of land where he will build a modern house and start poultry farming and also start tomato growing where he plans to begin with 500trees. Habumuremyi fi nally advices that, “Farming projects require innova on, moderniza on and ability to sustain them fi nancially. And the quickest and easier way for farmers to acquire this is by partnering with microfi nance ins tu ons so as they are able support you fi nancially and also advice you accordingly on how to mul ply your wealth.”

From Subsis tence farming to large scale producer; thanks to CLECAM.

Prosper in his irish potato garden


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 refl ec on and delibera ons, Mugemankiko sat down and wrote a project proposal that he took for funding to a local micro-fi nance 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 fi rst Mugemankiko was off ered 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-fi nance 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 off ers me a loan,” Mugemankiko explains. “It takes a mere fortnight and I have the money.”Life changerEstablished in 2009 and set in the centre of Nyamagabe

TAKING AGRICULTURE TO THE NEXT LEVEL: COOPEC TWIZIGAMIRE

Mugemankiko shows off his wheat plantation


town, south of the country, Coopec Twizigamire boasts of over 8400 members dispatched in the districts of Nyamagabe, Nyaruguru and Huye.The coopera ve operates on the basis of community-oriented micro-fi nance ins tu on, off ering short-term loans to its clients for a period ranging between three months to two years maximum depending on the kind of credit requested.Many of the coop’s members are farmers and middle-class businesspeople dealing mainly in the sale of chemical fer lisers to farmers or involved in retail sale of various items.Currently over 129 million Rwandan francs off ered as loans to 164 members are being used to implement several projects in its opera on zone, according to Terence Dusabimana, a loan offi cer with the saving and credit coopera ve. Hundreds of millions of francs were also given out to members in the past years and have been successfully paid back, he notes.“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 offi cer, 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

repay the loans within the agreed period.Every day, Mugemankiko travels kilometres from his home village to supervise workers in his fi elds. For him

to be able to travel as he wishes, he has bought a TVS motorcycle that he rides every morning and evening to and from work.“I would advise other farmers to put aside their fears of acquiring loans because whenever you use them as planned and put the

money to good use you will always get benefi ts,” he advises. “It is crucial if we want to move from tradi onal to modern agriculture.”Climate-related challenges“Working with the coopera ve has been a very crucial step in improving my business,” observes Vedaste Mboneye, a fer liser seller in Nkumbure cell of Tare sector. “Had I not worked with this coopera ve, I wouldn’t have had the capacity to start the sale of fer lisers which was badly needed in this area.”Offi cials and members of the coopera ve say the major challenges they are facing are related to climate change,

“Whatever I have achieved was a result of working with this Micro-fi nance ins tu on” Says Mugemankiko


which some mes aff ects 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.”

Viateur 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 defi nes 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 fi nancial 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-fi nance 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 fi nancial 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 aff ect 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 benefi cial working with micro-fi nance 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


AMIR AND FINANCIAL INCLUSION IN RWANDA.

Financial inclusion at mes known as Inclusive Financing can be defi ned as the delivery of

fi nancial services at aff ordable costs to sec ons of disadvantaged and low-income segments of society, in contrast to fi nancial exclusion where those services are not available or aff ordable. Financial services are those economic services provided by the fi nance industry which among others include savings, loans, credit union, insurance credit cards, and fi nancial management.

United Na ons’ millennium development goal number one is poverty eradica on which should be achieved before the close of 2015. In Rwanda the government aims at doing all that is possible to see poverty allevia on be achieved through all means by 2020. The ul mate objec ve of Rwanda’s long term development plan is to transform the country into a middle-income country and an economic trade, communica on and fi nancial hub by the year 2020. The government therefore has partnered with various ins tu ons including among others Associa on for Microfi nance Ins tu ons in Rwanda an umbrella organiza on that puts together all microfi nance ins tu ons in the country in the struggle for poverty allevia on.

AMIR is the only professional microfi nance associa on in Rwanda with currently 62 members. It is guided by the vision of becoming a strong and effi cient organiza on that contributes to the development of the microfi nance industry through the promo on of transparent management systems in MFIs, innova ve and market-led fi nancial services and products. Therefore to fulfi ll this vision, AMIR has the mission of off ering diversifi ed services to the micro fi nance

ins tu ons and the sector at large that enable them to work professionally and contribute to poverty reduc on in a sustainable manner.

Microfi nance is one of the important sub-sectors in achieving vision 2020 goals. It acts as a catalyst contribu ng towards transforming Rwandan economy into middle income country. It plays a crucial role in changing the country’s economy from subsistence agriculture to knowledge based society through various fi nancial products and services, fi nancial literacy and educa on programs. As a result there is improved savings which cul vates private investments. The government has set a target of 90 percent fi nancial inclusion by 2020 and the evidence of progress toward this goal is everywhere: Adver sements for mobile-money products are painted and plastered onto almost every available surface and, if you know what to look for, it doesn’t take long to spot an Umurenge Savings and Credit Coopera ve (Umurenge SACCO) – Rwanda’s signature fi nancial inclusion ini a ve.

Six years ago, the 2008 FinScope survey found that that 47 percent of Rwandan adults used some type of fi nancial product or service, but just 21 percent were par cipa ng in the formal fi nancial sector, which was at the me made up mostly of banks but which also included a handful of microfi nance ins tu ons and SACCO.

AMIR for six years has seen massive progress and contribu on to the achievement of vision 2020 and fi nancial inclusion in par cular through various ac vi es and programs; these are some of AMIR’s contribu on to the achievement of fi nancial inclusion in Rwanda.1. Promo on of informal inclusion mechanisms

and ini a ves & Bring Social Performance

MAKING THE LEAP…


Management into the mainstream of Rwandese microfi nance

AMIR - SBFIC have enormously contributed in fi nancial eduac on to equip Rwandans with the necessary knowledge. So far 29,000 children have opend savings accounts with MFIs/SACCOs. Those children saved an amount of Rwf 140,000,000 in individual saving accounts.

AMIR - AFLATOUN trained 370 teachers in child social and fi nancial educa on curriculum: This is also a contribu on to youth inclusion in fi nancial services.

By Informal inclusion promo on, AMIR has partned with CARE Interna onal to scale up Village Savings Loan Associa on (VSLA) projects within 3 microfi nance ins tu ons in 2013. The monitoring report has shown a good working rela on between VSLAs and Microfi nance Ins tu ons especially in increasing the VSLA lending capital.

2. Increasingly effi cient and adequately

governed MFIs ensure a steady growth in fi nancial inclusion & Client oriented product development and diversifi ca on

By suppor ng agri-lending and micro leasing AMIR has contributed in diversifying products that MFIs off er thus to met the needs and protec on of clients. Marke ng strategies developed to MFIs have

c o n t r i b u t e d in products r e f i n e m e n t , d e v e l o p m e n t a n d diversification for target new segments which contributes to areas of product d e v e l o p m e n t and inclusive fi nance in N a t i o n a l Micro fi nance Implementation S t r a t e g y . (NMPIS).

AMIR also has played much in 2013 in the professionalisa on of the microfi nance sector by advising MFIs to report their data regulary to the central bank and to Mix market. This has helped in increasing transparence and the visibility of Rwanda microfi nance sector.In a nut shell therefore fi nancial Inclusion is an interna onal public strategy that is being campaigned so as to see the majority popula on across the world who are the poor households not only survive on a dollar per day but also be able to mul ply it and have more to save and develop their livelihood.

Irigoga Charlo e

rwanda microfinance magazine issue 3

Documents

rabobank delega

rabobank visitors

amirrabobank founda

subsidiary rabobank

umutanguha finance

agricultural fi nance

process of umutanguha

fi nancial support