Micro-finance institutions have been urged to harmonise their legal and institutional regulatory procedures to attract investors and promote economic integration.

Jonathan Gatera, the director-general of financial stability at the National Bank of Rwanda, said there is still a big gap in terms of financial inclusion in the region where microfinance sector is expected to play a key role.

Gatera was addressing regional micro-finance managers during the East Africa Microfinance CEO’s roundtable meeting in Kigali yesterday.

"The need to have inclusive financial systems should be a central goal for the East African Community and especially the micro finance sector. The EAC is at an advanced stage and the micro finance institutions should not be left behind,” Gatera, said.

The two-day forum is being held under the theme, "The role of microfinance in EAC economic integration.”

Access to finance remains a challenge in the region, making it paramount to further develop an open regional trading financial system that is not discriminatory and will work toward narrowing the gap, Gatera added.

He also noted that weak legal infrastructure systems could undermine the development of micro finance sector in the region if not addressed.

Benefits of harmony

Jowel Mwakitaru, regional coordinator of East African Microfinance Institutions Network, said harmonising microfinance industry will boost cross-border trade, reduce the cost of doing business, and improve the quality of financial services in the sector.

"It will also attract more investors into the sector which will ultimately increase the number of regional microfinance institutions in the region and boost financial inclusion,” he said.

There are many areas that need to be harmonised to be able to create impact at regional levelLast year, a regional survey on household incomes indicated low levels of resource mobilisation, at less than 23 per cent.

Mobilising finances

Mwakitura said through harmonisation, the sector will be able to help EAC partner states mobilise financial resources.

"How do we put in place systems that are compatible to each other, to be able to tap into opportunities with the integration process? In terms of taking this region forward we have to come together and create some sort of uniformity,” he said.

Jean Marie Vianney Nzagahimana, the president of the Association of Microfinance Institutions in Rwanda (Amir), said the sector needs to shift from individual microfinance schemes to building financial systems at an integrated regional level.

"As a region, our evolving of financial services should be aligned with the concept of integration, which offers a ray of hope to the region by information and experience sharing. These are critical linkages that will help in overcoming the undesirable speculative volatility and the resultant tests in the sector,” Nzagahimana noted.

Moving together is the only holistic and coordinated manner of building regional micro finance institutions, he added.

Peter Rwema, Amirs director of programmes, said harmonisation is a tool for improving the legal and institutional regulatory framework that would strengthen the sector.

Micro-finance is globally increasingly becoming the preferred weapon in reducing poverty, creating jobs and developing income generating activities.

The micro-finance sector in the country continues to grow, with their assets increasing by 27.4 per cent in 2013.

The saccos are equally posting strong results with deposits growing by 31 per cent in 2013.

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