MFI crackdown: 20 under arrest

The number of former managers of Micro Finance Institutions (MFIs) in detention has increased to 20 prosecution has said. The prosecution last month mounted a crackdown on the institutions’ former managers while investigating allegations of abuse of public funds that led to their subsequent collapse. In 2006 several MFI’s around the country closed down leaving thousands of Rwandans who had billions of francs worth of deposits with them in despair. The government had to come in and bail out the financial institutions to the tune of Frw3 billion. According to the Deputy Prosecutor General, Alphonse Hitiyaremye, 20 people have been detained at Remera Prison in Kimironko. Initially, 33 had been arrested, but according to Hitiyaremye, 13 were released provisionally after presenting sureties to court assuring it they would not jump bail. In our investigations, we discovered that some managers used to write chits ordering accountants to give big sums of money to either their friends or relatives, which is simply a corrupt and illegal way of giving loans, Hitiyaremye said in his offices last week. Earlier, Prosecutor General Martin Ngoga had said that not only the managers would be pursued, but some clients who illegally obtained money from the institutions under the disguise of loans would also be targeted. Hitiyaremye warned the former clients to present themselves immediately to the liquidators at the Bank Populaire de Rwanda or risk facing arrest.. The irregularities in the MFIs led depositors to lose over to Frw 6 billion but the government, through the Central Bank intervened and has so far reimbursed half of the money to the owners. According to Ngoga, the remaining sum will be recovered from the former managers. We shall even attach their properties to come up with the money, he said last month. Microfinace institutions in question are Gasabo, Intambwe, Igisubizo, Ongera, Urumuri, Urugero, Gwiza, Ubumwe-Iwacu and Iwacu.Ends

National

MFI crackdown: 20 under arrest