BRD rewards best performing MFIs

In a bid to promote good management of Micro – Finance Institutions (MFIs), the country’s investment bank, the Development Bank of Rwanda (BRD) has rewarded four MFIs that have exhibited good management skills in their operations. The winners include Duterimbere IMF Sarl, COOP-EDU, CAPEC Rubengera and Rwanda Microfinance limited on Tuesday walked away with brand new Toshiba laptops at ceremony held at Nyandungu ,La Palisse Hotel. The move follows efforts by government to strengthen operations of MFIs in order to encourage savings culture. In an interview with Business Times , Jack Kayonga the Acting Managing Director, BRD said that rewarding MFIs supplements government’s decision earlier this year to boost their operations in order to increase their penetration country wide. “A small portion of the Rwandan population is able to access the financial services and products. The government is investing a lot of money through micro-finance institutions to increase penetration to provide the needed financial services,” Kayonga said. Kayonga also noted that BRD is holding discussions with stakeholders in the industry to agree on conditions set by government through the Central Bank for them to access finance from the institution. According to the new law guiding MFIs that became operational this year, every microfinance institution, must maintain a liquidity ratio of at least 30 percent at all times. This is the ratio between cash and cash equivalents to sight deposits and contingent liabilities. To encourage a savings culture among the local population Kayonga said, BRD is financing 20 percent of MFI’s deposits to encourage them to mobilize more deposits from their clients. “It should be an incentive for them to get deposits because we want to see a lot of savings in banks. Using MFIs with their penetration, they should be able to gather these savings,” he said. BRD has also reduced its interest rate from between 8-12 percent to 6 percent annually to facilitate MFIs to access credit. The new law also requires MFIs 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. According to the Ministry of Finance and Economic Planning, the Gross Domestic Savings are consistently in negatives ranging between -1 to -3 percent of Gross Domestic Product (GDP). The Gross National Savings (GNS) including net transfers have averaged 10 percent of GDP since 2001. This falls short of the 18 percent which is the required level of GNS for the EDPRS by 2012. Ends

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BRD rewards best performing MFIs