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Business
Capital market players target SACCO funds
PLAYERS in capital markets business are pushing for the listing of Savings and Credit Cooperatives (SACCOs) on the Rwanda Stock Exchange (RSE) as a way of tapping “idle funds” and attracting more people to invest in capital markets.
Shehzad Noordally, the General Manager CDH Capital, which offers stock brokerage services, says that SACCOs hold a lot of money from the public and investing it in capital markets would benefit members.
“We are trying to provide with them investment opportunities in the capital market and help them understand that they can still invest their money through shares and bonds,” he said.
Noordally is optimistic that listing SACCOs will help strengthen their governance and administrative systems that have put back efforts to fully bring the poor into formal financial system.
“We will build their capacity in terms of governance and risk management before they are listed on the stock exchange which I believe will be another great achievement,” he added
The SACCOs now boast of over Rwf 10 billion in savings. Most of them are part of government’s initiative—Umurenge SACCO—aimed at including the poor into the formal financial sector and access to credit for all.
Charles Furaha, legal and corporate affairs manager at Capital Market Authority (CMA) says that the awareness that is targeting SACCOs is aimed at educating the public on the importance of investing in
capital markets.
“We have to sensitive them to understand the capital market before we list them, they must be fulfilling all criteria needed to be listed on stack exchange,” he said
Mary Claire, a member of Masaka based cooperative says that investing in capital market would help most members have long term investment alternatives, adding that; “the challenge is that people do not understand how these markets work, but it is easier to invest compared to other ways”.
Capital markets Authority is currently rolling out sensitization campaigns to woe more people to invest in shares and bonds.
Contact email: dias.nyesiga[at]newtimes.coo,rw
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It has been the government's aim to bring financial services closer to the rural people, so that they can have access to microloans. What will SACCO members if they invest in BK, Bralirwa and Government bonds while they need money to improve their farms, send their children to school and raise more cash revenues? Is Capital Markets' Authority in line with GoR policies?
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Frank, I thank for your comment,Capital Market is exactly line with the GoR policies because investing in capital market is also one of the GoR’s policies. Please carefully read the vision 2020, Rwanda Financial Sector Development program policy and the EAC Development Strategy Paper to understand how Capital Market fit into the GoR Policy framework.The members of SACCO should be able to also operate beyond improving farms or paying schools fees of their dependant. SACCOS being credit and saving oriented they should be able also to invest long terms products like in shares, bonds, derivatives, futures, etc traded at capital market. In this way, SACCOs will able to grow in terms of capitalization and my wish is to see SACCO growing to be as richer as BK or KCB and or as Unit Trust of India and why not JP Morgan.Last but not least, SACCOs currently have billions of money on their current accounts, if not reinvested will devaluate. To avoid this situation, SACCO to invest in long term products that is in capital market is the reasonable option. Much Thanks
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