The National Bank of Rwanda (NBR) has encouraged the Micro-Finance Institutions (MFIs) in the country to deploy better practices in order to serve the population effectively. According to Francios Kanimba, the Central Bank Governor, BNR is working with MFIs in efforts to disseminate best practices countrywide. The central bank governor also explained that there are new prudential measures for MFIs to respect the industry in Rwanda. The governor said this at Hotel la pallise where the Associations of Microfinance Institutions in Rwanda (AMIR) had organized a one day conference on the best practices in microfinance industry under the theme ‘effective governance, management and innovation for quality and inclusive financial services.’ According to the new law that became operational this year, every microfinance institution, union or federation, must maintain a liquidity ratio of at least 30 percent at all times. This ratio is the ratio between cash and cash equivalents to sight deposits and contingent liabilities. “A microfinance institution must constitute a reserve equivalent to one half of this ratio in the form of treasury bills or term deposits with commercial banks,” said Pierre Kagabo Director of supervision microfinance at NBR. Kagabo added that these new norms will help the MFIs improve their work hence serving well their clients and their own development. The MFIs are also required to maintain a 15 percent solvency ratio from 10 percent previously. This is a net worth corresponding to a minimum of 15 percent of total assets. During the same conference, AMIR urged the MFIs to be innovative in order to become more competitive in the market.Peter Rwema, the in charge of Research and Product Development at AMIR, said that. Innovation is key to improving quality and creation of new markets and the extension of the product range. Ends
