Deposits in Microfinance Institutions (MFIs) increased by 25.1 percent to Rwf23b in 2010 from Rwf19b in 2009, demonstrating improvement in the sector’s financial situation and boosting recovery in the overall financial sector.

According to the central bank, the sector’s gross loans increased by 36 percent to Rwf33b as total assets grew from Rwf36b to Rwf45b in the period under review.

"The increase reflects high performances in bigger MFIs such as COOPEDU, as well as commendable performance by newly licensed MFIs,” the central bank said recently in its monetary policy and financial stability report.

According to the report, the number of licensed MFIs increased to 103 from 98 in 2009, where 416 SACCOs were established in line with the UMURENGE SACCOs programme with more people gaining access to financial services. 

While many SACCOs were licensed, the central bank says that some failed to acquire licensing due to failure of producing timely management tools such as business plans and procedure manuals.

"BNR set up intermediate steps whereby any SACCO accomplishing the requirements is allowed to grant loans. These include reaching a threshold of Rwf10m of deposits, having a manager, an accountant, a loan officer, a credit committee as well as a savings and credit policy,” the report reads in part.

So far, four SACCOs obtained operating licenses while only 56 SACCOs out of 412 have provisional license granting them access to loans.

The central bank also noted that the loan repayment defaulting in MFIs totalled to Rwf7.2 billion, whereby over 1,000 cases are in court.

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