Considering the low saving culture among Rwandans as a result of the ostentatious nature of our people in regard to lifestyle and attitude, the only way to create wealth and sustainable investments is through getting loans from credit and banking institutions. What happens in most people’s financial lives is simple to summarise.

An employee is wired money on his account not later than the 5th of the following month, withdraws half and stocks supplies, pays all the home bills, goes back for the quarter to clear the previous month’s debts, takes friends and family out and by 19th he or she can  not even buy a newspaper and is not even assured of food at home!

Because life has to go up to the next payment date, he or she borrows money to push  through, the trend of surviving on deficit fuelled by debts and dependence on the meagre salary goes on and on up to when it cripples a person’s brain to only thinking of earning the money, spending it and starve up to the next payment when the cycle continues.

Due to such a painfully stagnant status quo among the working class people, many have sought solace from money lending institutions like Banks, Micro Finance Institutions (IMF’s), Savings and Credit Organisations (SACCOS), among others.

These money lending institutions which are on principle driven by making profits from the interests and investment, have taken advantage of this wanting situation to consolidate a large clientele from employees of the different companies and organisations.

The reality of how hard it is to individually save and invest by salary earning employees, lies the viability strength of most of the loaning institutions.

After realizing how big and needy the clientele base is, these institutions have come up with a variety of products to suit the convenience of their various clients, who often have differing targets and plans.

Among the products offered include salary loans for employees, whose salary in this case becomes the collateral, where by after giving a loan to the client, the lending institution keeps on deducting a certain agreed amount of money from his or her salary up to when the loan and the interest is recovered.

Salary loans have positively impacted many employees’ lives; through enabling them acquire property like land, construct houses, and undertake investment, not mentioning other spheres of improved livelihoods.

However different banks have different principles, charges and guidelines followed while offering salary loans, for instance Ecobank gives group salary loans, where by employees of a certain company first mobilise themselves into a group, after which they receive a loan.  

Among the institutions that offer salary loans here include Cogea banque, MFI’s and other banking institutions, provided a person’s salary passes through their bank.   

Contact: gahimore@yahoo.com