Total assets belonging to Microfinance institutions fell by 6.3 per cent from Rwf42.9b to 40.2b between December 2010 and June 2011, owing to the upgrading of some institutions to bank status.

The central bank reported that Unguka IMF and CFE Agaseke were licensed as microfinance banking institutions as CSS-Zigama was upgraded to a cooperative bank, a move that impacted on the assets of the MFI industry.

Gross loans issued to the public by MFIs decreased from Rwf32.3b to Rwf30.5b while gross deposits slid from Rwf23b to Rwf21b.

The central bank, however, reports that the financial soundness of MFIs in terms of capital adequacy, improved as their liquidity ratio stands at 56 per cent compared to the minimum requirement of 30 per cent.

 "Taking into account Saccos established in line with Umurenge Sacco program, deposits collected and gross loans, as at June 30, 2011, increased from Rwf21b to Rwf35.7b and from Rwf30.5b to Rwf32.2b,  respectively,” Claver Gatete, the Governor of BNR said during the August monetary policy statement.

According to the Executive Director of MFI Rwanda, Rita Ngarambe, the drop in assets and loans does not necessarily indicate a gap in the MFI sector.

"The decrease is not about poor performance but rather because some MFIs were upgraded into banks. Although they are now microfinance banks, their target is still focused on facilitating small businesses,” Ngarambe said in an interview yesterday.

"Otherwise even without recording statistics from Unguka, Agaseke and Zigama, MFIs indicated steady growth with an outstanding portfolio and increasing number of clients.”

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