More than 400 financial experts from around the world are expected in Kigali in the next few days for the International Conference on Responsible and Inclusive Finance due next week.

Sector players have welcomed the summit saying it is an opportunity for stakeholders to discuss mechanisms and strategies on how to deepen financial inclusion in the region.

To be hosted by the Association of Microfinance Institutions in Rwanda (AMIR), the forthcoming meeting, slated for March 21-22, is expected to discuss strategies that will help foster a more responsible and inclusive financial system to help increase access to finance in Rwanda and sub-Saharan Africa in general.

Aimable Nkuranga, the AMIR executive director, said the summit is an opportunity for local MFIs to learn and share experiences with the financial experts.

"We have invited more than 200 leaders of microfinance institutions from around the world so they can share ideas on how to address the most urgent challenges affecting the sector, especially in Rwanda,” Nkuranga told The New Times yesterday.

The experts are also expected to discuss progress in policy, regulations and industry practices as well as client protection, he added.

The microfinance industry is a key player in efforts to deepen financial inclusion in Rwanda.

But the sector has for some time now been struggling with numerous challenges, including increasing bad loans.

However, the central bank recently noted that non-performing loans (NPLs) ratio for MFIs had dropped from 9 per cent in December 2016 to 8.2 per cent in December 2017.

Equally, the level of bad loans among Umurenge-SACCOs (grassroots-based savings and credit coops) declined from 13.1 per cent in 2016 to 12.9 per cent in 2017.

Embracing automation

The National Bank of Rwanda (BNR) recently called on microfinance institutions (MFIs) across the country to embrace automation and reduce the rate of bad loans before the end of the year.

This will, according to Monique Nsanzabaganwa, the deputy vice governor of the central bank, help deepen financial inclusion and boost access to finance.

Despite these challenges, MFIs continues to offer financial inclusion opportunities to the rural population.

The total number of accounts in MFIs increased to more than 3.4 million by December 2017, growing the sector’s total assets by 9.7 per cent (Rwf244 billion).

This is higher than the 6.6 per cent growth registered in 2016.

Equally, the central bank estimates that total loans by MFIs increased by 2.9 per cent year-on-year compared to the 14.9 per cent growth registered in December 2016.

This was largely due to the slowdown of economic activity, especially in the first half of 2017 as well as increased level of credit risk in the previous periods.

In 2014, the microfinance sector adopted a new application to help MFIs in performance monitoring.

A performance monitoring software application (PMT) is expected to enhance transparency and efficiency among microfinance institutions.

The technology also seeks to ease access to credit by the rural poor and help create a one-stop centre for data collection of all credit institutions at AMIR headquarters in Kigali.

Last year, sector players, through their association AMIR, embarked on a campaign to acquire new software core banking which, according to stakeholders, was designed to help automate the sector’s systems, and improve efficiency and transparency.

editorial@newtimes.co.rw