The government is pondering a move to merge all the 416 Umurenge (sector) Savings and Credit Co-operatives (SACCOs) under one umbrella agency to ensure better management and facilitate capacity building of personnel.

"We are presently harmonising processes and procedures of these institutions to ensure that the internal control system is effective and easy to operate,” Kevin Shyamba Kavugizo, the National Bank of Rwanda director of microfinance supervision, told Business Times in an interview.

He said discussions on how to consolidate the SACCOs were ongoing, adding that they would be run under an apex institution either at the provincial or national level.

The SACCOs are currently under the Rwanda Co-operative Alliance.

Kavugizo said the new move would strengthen the SACCOs’ role of meeting the needs of clients, allowing them to secure loans with less stringent collateral requirements compared to banks.

He said the business model used by the SACCOs eases barriers that hinder financial inclusion for people in the rural areas.

"SACCOs thrive because they are near to the masses. Rural people don’t have to worry of travelling long distances to access financial services,” he explained.

He said that 85 per cent of the SACCOs are breaking even, pointing out that the central bank is working on a model that will improve corporate governance to ensure SACCOs stay profitable.

Umurenge SACCOs have been performing well ever since they were introduced in 2009, especially in ensuring financial inclusion in the rural areas where there is minimal presence of the traditional banking service providers.

SACCOs are found in each of the 416 sectors in the country and have over 2.3 million account holders.

According to the central bank February monetary policy and financial stability statement, the sector recorded a 31.5 per cent growth in deposits, hitting Rwf37b at the end of June last year from Rwf28.2b in 2012. 

Over Rwf16.4b loans were given out, up from Rwf13.9b in December 2012. 

The SACCOs total assets increased from Rwf40.9b to Rwf54.7b, an increase of 33.5 per cent for the period under review.