Savings and Credit Cooperatives (SACCOs) in the three districts of Kigali and Gicumbi District in Northern Province will be consolidated into District SACCOs (D-SACCOs) by the end of December, according to the National Bank of Rwanda (NBR).

This follows the completion of the automation of all 416 Umurenge SACCOs in June.

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The automation phase involved transitioning the sector-level microfinance institutions from manual to automated management information systems for improved efficiency and service delivery.

The consolidation process will merge the automated SACCOs to form District SACCOs, with the former becoming branches of the latter.

The automation process, which began in January 2020, is seen as the solution to challenges affecting the subsector which had seen losses of an estimated Rwf 10 billion as of 2018.

Despite the formation of 416 Umurenge SACCOs starting in 2009, these institutions faced operational challenges, including manual business operations, limited scope of business, and lack of digital financial services for members.

To tackle these challenges, the Umurenge SACCOs automation and consolidation project under the Ministry of Finance’s leadership aims to professionalize their operations through a three-step process: automation, consolidation into District SACCOs, and then the establishment of a cooperative bank

ALSO READ: What automation of Umurenge SACCOs means for members

Clarisse Mushimirwa, Director of Microfinance Institutions at the central bank, said that ongoing preliminary studies will see the SACCOs in three districts of Kigali City and Gicumbi District consolidated by December.

"The completion of the consolidation phase [across the country] is expected in July 2025,” she added.

According to the Ministry of Finance and Economic Planning, future plans include District SACCOs purchasing shares in the proposed Cooperative Bank, and fostering strategic linkages to provide advanced financial services to members.

The ministry said the completion of the automation process of Umurenge SACCOs in June signified "Rwanda's commitment to financial inclusion and economic empowerment, setting the stage for enhanced financial services delivery and sustainable development.”

Findings of the Rwanda FinScope 2024 report revealed that SACCOs had 2.3 million members, with 43 percent of the them being farmers and 28 percent being people in the informal sector.

"The Umurenge SACCOs initiative is proving to be successful in providing formal services to Rwandans who would most likely not use formal financial services,” according to the report released in June.

SACCOs have been an integral part of Rwanda's financial landscape since the 1970s.