Bill to create Coop Bank tabled in Parliament

A bill to establish a cooperative bank has been tabled in Parliament, the Director General of Rwanda Cooperative Agency (RCA), Damien Mugabo, has revealed. Mugabo told over 100 members of farmers’ cooperatives who attended a one-day workshop in Rwamagana District on Friday that the Government was fine-tuning a proposal to establish a central cooperative bank in the country. There are 416 savings and credit cooperatives in the country, commonly known as Umurenge Sacco with billions of deposits and the central bank, the regulator of the financial sector, says that effective supervision such a big number of small finance institutions could pose challenges especially as they continue to grow their loan books and deposits. The National Bank of Rwanda has since 2012 been planning to merge in Saccos in districts with a view of forming a cooperative bank. “Discussions regarding the bank have commenced. It will focus on mobilising farmers and cooperatives to join hands to become agents of change. We hope that this will contribute to vibrant and sustainable rural communities in Rwanda; creating jobs and generating income,” he said. Mugabo said that thousands of farmers in the country were set to benefit from a bank that will only service cooperatives. The workshop was preceded by a ceremony to award best performing cooperatives with certificates of merit and cash. He told excited farmers that if all goes according to plan, the bank will start operating next year. The aim of the bank is to enable members gain easy access to affordable financial services. “The bank will be managed by well trained staff with oversight from an experienced board of directors.” The Governor of Eastern Province, Odette Uwamariya, said that non-performing loans are a major problem for Saccos, noting that authorities had decided to act against defaulters. “Unfortunately, some of the defaulters are local leaders… they were given medium and long term loans. Official committees set in districts, will help to recover loans from a number of defaulters,” she said. Farmers received the news well saying the bank would address most of their problems. “This is a great idea. We will be able to have ownership, access to finances and loans in our own cooperative bank; I believe this is a remarkable step to greater things in the agricultural sector,” Nepomuscene Maniraho, a farmer, said.

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Bill to create Coop Bank tabled in Parliament