MICROCAPITAL BRIEF: Rwandan Microfinance Institution Urwego Opportunity Bank (UOB) Reports Lending Fosters Social Reconciliation

Radio Netherlands Worldwide recently reported that microfinance in Rwanda is “booming” and the Netherlands is contributing to this “success” [1]. One of the potential effects of the rise of microfinance in Rwanda is social reconciliation. Faustin Zihiga, the Chief Operating Officer of Urwego Opportunity Bank (UOB) of Rwanda, the largest microfinance bank in Rwanda among those reporting to the Microfinance Information Exchange (MIX Market), suggests that in group-lending programs, survivors of the genocide mix in the same groups as perpetrators of the genocide. They begin to associate themselves by their group, not by their ethnic background. According to Zihiga, the social change is often even more visible than the economic change that microfinance brings about [3].

Following the genocide in the spring of 1994, within a very short time period, more than 200 Rwandan MFIs emerged. Over time, Western donor funding has increased, reaching USD 76 million in 2006 and USD 102 million in 2008 [1].

According to the MIX Market, UOB is the largest microfinance bank in Rwanda, with a loan portfolio of USD 5.2 million in 2008. The organization has approximately 35,300 active borrowers with an average loan balance of USD 118.9 per borrower, 49,500 depositors with USD 2.5 million in total deposits and USD 7.5 million in total assets [2]. There are currently 7 MFIs that report Rwandan operations to the MIX Market, with USD 24.8 million in total assets, approximately 54,300 active borrowers with an average loan balance per borrower of USD 640 and 102,981 depositors with USD 8.2 million in total deposits.

By Conner Brannen, Research Assistant

Additional Resources:

[1] MICROCAPITAL BRIEF: MasterCard Foundation, CARE Canada, Aga Khan Foundation Canada (AKFC) to Extend Microfinance Services in Tajikistan and Rwanda, March 15, 2010: https://www.microcapital.org/microcapital-brief-mastercard-foundation-care-canada-aga-khan-foundation-canada-akfc-to-extend-microfinance-services-in-tajikistan-and-rwanda/#more-4545

[2] MICROCAPITAL BRIEF: The International Finance Corporation (IFC) to Invest $7.5m in Fanisi Venture Capital Fund, A Luxembourg-Based Fund That Invests in Startups and Existing Small and Medium Enterprises (SMEs) in East Africa, January 26, 2010: https://www.microcapital.org/microcapital-brief-the-international-finance-corporation-ifc-to-invest-75m-in-fanisi-venture-capital-fund-a-luxembourg-based-fund-that-invests-in-startups-and-existing-small-and-medium-enterpris/#more-4364

[3] MICROCAPITAL BRIEF: FINA Bank Rwanda (FBR) and KfW Development Bank (KfW) To Invest RWF 490.4m ($860,000) In Rwanda’s Microfinance Sector, December 23, 2009: https://www.microcapital.org/microcapital-brief-fina-bank-rwanda-fbr-and-kfw-development-bank-kfw-to-invest-rwf-4904m-860000-in-rwandas-microfinance-sector/#more-4223

[4] Opportunity International: “Helping Rebuild Rwanda”: http://www.opportunity.org.uk/Page.php?id=144

[5] MIX Market: “Urwego Opportunity Bank (UOB)”: http://www.mixmarket.org/mfi/uob

Bibliography:

[1] Radio Netherlands Worldwide: “Microfinance in Rwanda: Booming After the Genocide” by Sophie van Leeuwen. May 3, 2010: http://www.rnw.nl/english/article/microfinance-rwanda-booming-after-genocide

[2] Opportunity International: “Change in Rwandans’ Lives”: http://www.opportunity.org.uk/Page.php?id=145&PHPSESSID=7a0a5a896ed246590fae447e8490fbeb

[3] MICROCAPITAL STORY: Urwego Opportunity Bank (UOB) of Rwanda Microfinance Loan Portfolio Reaches $5.2m and Savings Reaches $2.6m, May, 29, 2010: https://www.microcapital.org/microcapital-story-urwego-opportunity-bank-uob-of-rwanda-microfinance-loan-portfolio-reaches-52m-and-savings-reaches-26m/

[4] MIX Market: Microfinance in Rwanda: http://www.mixmarket.org/mfi/country/Rwanda

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