Microfinance institutions (MFIs) have been challenged to design products that meet the needs of customers, especially the small-and-medium enterprises (SMEs) market segment.

Prof. Alison Brown, a researcher at Cardiff University in the UK, made the call during the release of research findings on Rwanda’s microfinance sector in Kigali on Monday.

He also urged MFIs to improve skills of their personnel, as well as create market-oriented products to attract more customers.

The study was conducted by Cardiff University in collaboration with the Association of Microfinance Institutions in Rwanda (AMIR) and funded by UK’s DfID.

The study also showed that unsecured credit and lack of insurance are some of the big constraints faced by the micro-enterprise in the country.

It indicated that lack of skills and innovative products, as well as low access to information and financial literacy "are making it difficult for micro-enterprises to secure loans”.

Prof. Brown said, unless financial inclusion is part of package of inclusive growth that recognises the role of micro-enterprises, their potential will be continually undermined.

"You need to look at the needs of micro-enterprises and also ease access to financial services to this marginalised group. However, this will need a more innovative and sustainable microfinance industry,” Brown noted.

He pointed out that small businesses need financial services that help them save, as well as ease access to insurance services, credit and information on bank products.

Callixte Kalisa, the director general of CAF-Isonga, called on MFIs to ensure governance and observe ethical conduct, especially when handling loan applicants.

Jean Pierre Uwizeye, the head of capacity building and financial education at AMIR, said the association was working with development partners to strengthen the capacity of its members, adding that they have embraced technology to improve service delivery.

He noted that the association has already started a training programme to equip workers of Umurenge SACCOs with requisite skills that will help improve service delivery, especially in rural areas.

The sector’s total assets rose by 17.7 per cent, from Rwf159.3 billion in December 2014 to Rwf187.5 in June this year, driven by loans and liquid assets, which rose by 8 per cent and 37.4 per cent, respectively.

Its deposits grew by 21.8 per cent, to Rwf104.9 billion in June, from Rwf86.1 billion in December 2014. However, the asset quality, measured by non-performing loans ratio, deteriorated slightly to 7.4 per cent in June, from 7 per cent end December 2014.

business@newtimes.co.rw