Finance sector regulator, the National Bank of Rwanda (BNR), is in consultations with stakeholders to consolidate management of the hugely successful Savings and Credit Cooperative organisations, Umurenge Saccos.

The plan is to merge management at district or provincial level to form some kind of apex body that can oversee operations at lower levels and also ensure effective monitoring by BNR.

Considering tremendous gains made by Saccos, since inception, in terms of mobilising savings and disbursing loans; this move by BNR is long overdue.

For starters, there are about 416 Umurenge Saccos countrywide and nearly all are recognised by the central bank as having met licensing requirements to provide financial services.

BNR figures show that more than half of these Saccos have broken even. This means that they are making profits. Above all, there are about 1.6 million ac­tive accounts by members with deposits in excess of Rwf30 billion.

By any standards, this is a lot of money that can be put to better use with a more streamlined management structure in place. The big number of account holders also means that Saccos have a grassroots base that the country needs to achieve 100 per cent financial inclusion.

By merging at the top, a cooperative bank that is responsive to the needs and aspirations of these people, who are outside the formal banking sector, can emerge.

Previous studies show that one of the reasons rural people have not warmed up to doing business with commercial banks is the confusing and intimidating paperwork required to get even a basic service like depositing money. Saccos have demystified this and that explains why they manage to mobilise such huge savings.

With a little training in budgeting, cash flow management and how to invest excess funds, there is real opportunity for a cooperative bank to emerge.