MICROFINANCE IN RWANDA
There are many microfinance organizations in Rwanda. These are UOB or Unwego Opportunity Bank, Amasezerano Community Bank, RML or Rwanda Microfinance Limited, CFE or Center Financier aux Entrepreneurs S.A. agasake and many others. Their total loan grosses to 20.5 million in USD combined and their active combined members reaches to 45,571 about 72 USD on individual initial loan or depending on micro-financing scheme as of the latest report of 2009 (www.themix.org).
Microfinance organizations are loan or funders who lend money to low income individual so that they can use it to re establish and expand their own individual or group business. They lend to people who usually do not have access or not qualified to borrow to the bank or other formal financial agency. The statistic above shows an increasing numbers of borrowers who simply want to have a good living condition and Microfinance organization has been very successful in lending these people their primary purpose is not just business but mainly to alleviate poverty in Rwanda.
It is quite obvious that Rwanda need this kind of services that the government can’t provide because of lack of funds. The Consultative Group to Assist the Poor or CGAP addresses the challenge of poverty by giving a specific information to organization and individual the current trend and the mix market that you can usually find on the MIX market or www.themix.org this website is very useful to organizations and borrowers because of the organized reports according to their need and an immediate availability of information from the internet. In fact they have reach more than 300 microfinance institution including banks, NGO’s, credit unions and other financial agency that helps the nation building and poverty alleviation in Sub Sahara Africa.
As of today Rwanda is a peaceful place to live although you can see poverty stricken community that shows the reality of this country that is why Micro finance organization find its way to help them although they can only do so much and only a little portion of Rwanda are covered attracting only more than 2000 clients per year this is just a small figure and their country has more needs. Some people may not be qualified to borrow money because of their low socio economic standing; low education and skills are also the reasons why they may not able to borrow money from this institution. Micro finance companies doubted how they are able to pay such loans. More so the effects of “genocide” or mass killing created a division between people in Rwanda and other neighboring countries in Africa individuals themselves are frightened to join such organizations or groups.
Usually is it a common practice in Micro Financing to form a group accordingly and meet together weekly or bi monthly and through this they spend a series of learning various topics and after that is the payment process. During the pre operation they are trained to cooperate with each other and pay their loan through a mutual concern or co borrower’s agreement to pay. But people dislike group meeting and traveling and they are reluctant to pay the amount of money that others have borrowed this create more burden rather than help in their business. Through this system their clients may sometimes do not agree to repay the group guarantee.
Some members are willing to pay and some are not, this setting sometimes even creates a fight involving non payments from their members. Some would suggest that they will only pay the loans through individual concern, but in the part of the Microfinance organizations it is too risky to lend money through individual loan process since they cannot provide collateral. Group loans sometimes delay the process or disbursement and they do not want to wait too long for their group members although they are not even qualify to borrow from banks.
This is not always the case there are groups who are courageous and willing to pay, they choose members that are well trusted by their community and if by chance some members did not pay their loan in time some members are cooperative enough to help. This setting creates harmony and cooperation among members and they themselves strengthens each other and helping their members to grow their business.
If only all groups would only learn to develop this kind of activity so they themselves help each other then they will all be successful. After they have reach the maturity of their loan and paid all their group balances, they will renew the process into another cycle of borrowing loans from micro-financing organization and by this time they will thank the agency by getting a bigger amount.
Credit:ivythesis.typepad.com
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