Money. This coveted medium of exchange is a salient capital to any potential business start-ups. But for those who dream of running businesses, the question is always down to how to get this capital.

A bank is one such option, but for Sophia Nzamwitakuze and many Musanze business community members, there was another way...

It wasn’t that Nzamwitakuze was just starting a business; in her case, she was anxious to revive a failed source of livelihood.

Once a promising businesswoman in Musanze town running a mini supermarket, Nzamwitakuze was forced to close her business after suffering bouts of losses.

So she later heard of people around the town who were lending money to those in need at an interest recouped within an agreed period.

In desperation, Nzamwitakuze went for the money. All she could see before her eyes was a mirage telling her that her supermarket would be back on its leg again, this time, even bigger and better.

She was so wrong.

Exorbitant interest rate

For Nzamwitakuze to get money from the dealer, she was required to either sign a cheque or stake land title or a deed for any other property as collateral.

"I was introduced to the dealer by a man belonging to a group commonly referred to as chercheurs (brokers). He took me to the dealer and we discussed the way I would repay him,” she says.

"I had no account in a bank to request for a loan so I resolved to get money from an individual,” she adds.

Commonly known as Banque Lambert among the locals, loan sharks becomes a problem if the borrower does not meet deadline, because interest are normally high.

It is a kind of business that has been rampant in Musanze District and in other parts of the country, but local leaders say it is "a deadly cancer” harming people’s welfare, national economy and affecting national security.

Although Nzamwitakuze knew she would repay three times more the money she was given plus a monthly interest of 20 per cent, she blindly received the money thinking she could resurrect her dead supermarket and garner profits to repay the loan sharks.

"He gave me the loan of Rwf800,000 that would generate threefold of interest, plus the interest of 20 per cent per month, I had no choice and decided to get the money; to be honest, I never took time to do the maths,” Nzamwitakuze says.

This means that the woman was supposed to pay Rwf2,4 million in no fixed period but she also had to pay Rwf160,000 as a monthly interest run.

"Although I received the money, I knew it would be hard to pay the loan, I only wanted to restart my business and see what could be next... I was only pushed by problems as my children were going to die of hunger,” she says.

The profit agreed between the two parties normally ranges between 15 per cent and 35 per cent of the principal and the period of time within which to pay but it can vary according to the agreement.

It is said that millions of francs have been lost by business communities in this illegal business while some lenders have got huge profits from it.

Losing property

Nzamwitakuze’s property was eventually confiscated by the loan shark as he had all the deeds.

"I failed to pay and the lender wanted to auction my two small houses but he later took them over. I am now homeless and don’t know how I can reclaim my property,” she says.

This kind of transactions has been rampant in Musanze District, and involves hundreds of business community.Nzamwitakuze, together with 16 other ‘victims’ of loan sharks, have petitioned Police over the matter, saying they were cheated.

However, since filing their case on December 20, last year, nothing has happened.

Local leaders and bank managers say money lending is an illegal transaction that affects economically and socially involved people as well as their families.

Musanze mayor Winifrida Mpembyemungu described the transaction as a deadly cancer which was harming both the economy and society.

She said they were working hard to mobilise the public and help them understand the dangers of the business and encourage them to work with banks instead.

Elia Nduwayesu, the president of Private Sector Federation, admitted that loan sharks, which was outlawed by the National Bank of Rwanda (BNR), was rampant in Musanze but they were working with local leaders to curb the vice.

"There are many people involved in this business though we don’t have figures. We are mobilising the business community to avoid this. Some of business people say they go for this to avoid delays in banks to get loans. We also met bank managers to discuss how they can speed up their services,” Nduwayesu said, adding that some people had fled their homes due to failure to raise funds to pay those who gave them money.

Police in the Northern Province say the vice has reached another level and they have recorded several cases.

Andre Hakizimana, the Northern Regional Police spokesperson, said they are working on a number of cases related to the issue, but he could not give the exact number of cases they were dealing with as he was speaking to The New Times while of office.

BNR Governor John Rwangombwa said the business is "illegal and unacceptable.”

"Banque Lambert is something we have to fight a lot as it affects the economy in general as well as social cohesion. If you go for Banque Lambert, you lose your property which is given as collateral after you have failed to pay the money with high rates in a short time,” said Rwangombwa.

He said Banque Lambert was an issue of monetary insecurity.

editorial@newtimes.co.rw