by Hio Kyeng Lee -

MICROCAPITAL BRIEF: FINA Bank Rwanda (FBR) and KfW Development Bank (KfW) To Invest RWF 490.4m ($860,000) In Rwanda’s Microfinance Sector

FINA Bank Rwanda (FBR) and KfW Entwicklungsbank (KfW) have signed a financial agreement worth RWF 490.4 million (USD 860,000) to develop Rwanda’s Micro, Small and Medium Enterprises (MSMEs). The funds will be used for apprenticeship and training programs for both FBR’s staff as well as the microbusinesses to whom FBR lends money.  FBR’s Managing Director, Steve Caley stated that, “this gives [FBR] confidence that the funds will be well spent because by this [program] we know that the loans are given to trained people.”  This approach also includes the establishment of a specialized microfinance department within FBR.

by Hio Kyeng Lee -

MICROCAPITAL BRIEF: United Nations Development Program (UNDP) Commits $4m To Build Inclusive Financial Sector in Rwanda

The United Nations Development Program (UNDP), through the United Nations Capital Development Fund (UNCDF) has committed USD 4 million to building an inclusive financial sector in Rwanda. The funds will continue the implementation of Rwanda’s National Microfinance Strategy from 2009 through 2014. Rwandan Minister of Finance, John Rwangombwa, noted that, “the support given by UNDP/UNCDF is aligned to Financial Sector Development Programmes and the National Monetary Fund Policy Implementation Strategy to contribute to the refinancing and sustainable management of Microfinance Institutions.” Minister Rwangombwa stated that the projects aims to improve productivity and enhance the market access of microenterprises.

by Christopher Maggio -

MICROCAPITAL BRIEF: BASIX Group Providing Technical Assistance to Microfinance Institutions in South Africa, Ethiopia and Rwanda

BASIX Group, which consists of several companies based in India that participate in microfinance and business services to the poor, has begun to provide technical assistance to microfinance institutions (MFIs) in various African nations such as South Africa, Ethiopia, and Rwanda [1,2]. This comes after BASIX has already provided technical services to MFIs in Papua New Guinea, Timor Leste and Sri Lanka [1]. MicroCapital reported on Basix’s role as a “technical partner” for a USD 1 million equity investment by the International Finance Corporation (IFC), the investment arm of the World Bank, in the MFI ‘Papua New Guinea (PNG) Microfinance’ [3]. BL Parthasarathy, the Senior Group Vice-President of BASIX, has stated that “To meet the needs of global customers, it is necessary to foray into the least developed countries and emerging [markets]” [1]. He also says that BASIX will begin to “interact with MFIs” in Kenya, Tanzania and Zambia this month [1]. In the following three years, BASIX “[hopes] to reach out to over 10 countries” [1].

by Diya Chopra -

MICROCAPITAL.ORG STORY: US Congressional Delegation Visits Opportunity International Microfinance Bank in Kigali, Rwanda to Promote Proposed US Government Funding for Human Capacity Building in Developing Countries

Mr. Gregory W. Meeks, a United States (U.S.) Congressman representing New York State’s Sixth Congressional District in the U.S. House of Representatives recently led a delegation to Kigali, Rwanda. The representatives met to explore the existing microfinance situation in sub-Saharan Africa, and to better understand the needs for expanding micro-banking services in the region.

by Goda Thangada -

MICROCAPITAL STORY: African Credit Information Company Compuscan Establishes Private Credit Reference Bureau in Rwanda

A new private Credit Reference Bureau (CRB) has been established by the African credit information company Compuscan in Rwanda. Compuscan will compile and share credit information about borrowers between banks and non-bank financial institution. The National Bank of Rwanda (BNR) has approved a three year contract with Compuscan to provide credit information to financial institutions within the country. Michael Malan, managing director of Compuscan, comments, “The principle of data reciprocity will apply. Users of data will be required to share data in order to view data ensuring fairness for all.” In 2009, the World Bank “Doing Business” Survey gave Rwanda’s credit information system a “2” out of a possible high score of “5”.

by Sally Levy -

MICROCAPITAL STORY: Urwego Opportunity Bank (UOB) of Rwanda Microfinance Loan Portfolio Reaches $5.2m and Savings Reaches $2.6m

Urwego Opportunity Bank (UOB), a Rwandan commercial bank with a focus on microfinance, announced today that its loan portfolio has reached USD 5.2 million. This is an increase of 73 percent since 2006. The increase has been attributed to the growth in its savings portfolio which has now stands at USD 2.6 million. Savings are becoming an increasingly important method of funding for microfinance institutions (MFI) because it is cheaper than other sources of funding and easier to mobilize. In Africa, MFIs have found it difficult to mobilize debt capital in the past but can use deposits when it is available and a stable source.  

by Laura Anderson -

MICROCAPITAL STORY: International Finance Corporation Rwanda CEDP Leasing Program Calls for More Leasing to SMEs by Financial Institutions at Workshop Organized by Rwandan Association of Micro Finance Institutions in Collaboration with Rwanda Development Board

The International Finance Corporation (IFC), a member of the World Bank Group that provides investments and advisory services to build the private sector in developing countries, has called upon financial institutions to embrace micro leasing for Small and Medium Enterprises (SMEs) during a micro leasing awareness workshop at the Laico Hotel in Rwanda. The workshop was organized by the Association of Micro Finance Institutions (AMIR) in collaboration with the IFC’s Rwanda CEDP Leasing Development Program and the Rwanda Development Board (RDB).

by Bharathi Ram -

MICROCAPITAL STORY: The MasterCard Foundation in association with the Aga Khan Foundation Canada (AKFC) and CARE Canada to Invest USD 9m to Expand Savings Initiatives in Tajikistan and Rwanda

The MasterCard Foundation, an independent, private foundation based in Toronto, Canada has announced two new programs to expand savings initiatives in the countries of Tajikistan and Rwanda. According to a press release on PR Newswire, a total investment of USD 9 million will be made towards these programs aimed at strengthening and creating innovations within the Village Savings and Loan Association (VSLA) model. The program in Tajikistan will be in association with the non-profit, Aga Khan Foundation Canada (AKFC) whereas CARE Canada (an operational member of the private, international humanitarian organization CARE International) will be involved with the MasterCard Foundation for the Rwandan initiative. The electronic news and information portal, PR Newswire is headquartered in New York, USA and is a subsidiary of the London based global business media company United Business Media Plc.

by Bharathi Ram -

MICROCAPITAL STORY: Depositors in Rwanda Approach the Ombudsman’s Office for Help to Recover their Deposits From Corrupt Microfinance Institutions

Nearly two years after the crackdown on corrupt Microfinance Institutions (MFIs) in Rwanda by the Central Bank of Rwanda (BNR), depositors are still struggling to retrieve their deposits caught up with the fraudulent MFIs. According to a press release found on AllAfrica.com, in an effort to collect their money, depositors have decided to file their concerns with Rwanda’s Ombudsman’s office.

by Lori Curtis -

MICROCAPITAL STORY: Rwanda’s Microfinance Industry Struggles with Low Portfolio Qualities

The growth of Rwanda’s microfinance industry is impeded by hundreds of thousands of borrowers who have failed to service their loans, contributing to high non-performing loan portfolio percentages in microfinance institutions (MFIs), it was reported in All Africa. MFI’s in Rwanda are currently dealing with poor loan repayment from their clients as a result of diverting loan funds to meet their personal needs instead of using them for the proposed investment. A number of Rwandan officials have commented on the situation, acknowledging that this is a serious problem in Rwanda. Gideon Kayinamura, a member of Rwandan Parliament advises that it is important for clients and lenders to come to a roundtable and fully understand the transactions before loans can be disbursed and Prosper Nyirumuringa, director of the Microfinance Development and Financing Fund of Rwanda Development Bank (BRD), advised MFI management to introduce officers who will be responsible for following up on the actual spending of loan money so that the expected investment returns are achieved. A variety of studies and surveys have identified key challenges and deficiencies in Rwanda’s microfinance industry that contribute to some of the low portfolio qualities of MFIs.

by Jennifer Lee -

MICROCAPITAL STORY: The World Bank Gives $6mn to Rwandan Government for Microfinance Sector Reforms

The World Bank will grant USD 6 million to the Rwandan government for the ongoing reform of the microfinance sector. The injection will also support the improvement of auditing and accounting standards and strengthen the regulation and supervision of non-bank financial institutions (NBFI) and microfinance institutions (MFI).

by Melissa Duscha -

MICROCAPITAL STORY: Crackdown on Crooked Microfinance in Rwanda

Rwandan Prosecutor General, Martin Ngoga announced that fifteen former microfinance institution managers had been arrested over a period of four days for defrauding depositor money after a year-long investigation following a government shut-down of 8 bankrupt microfinance institutions in June 2006.

by Elizabeth Nelson -

MICROCAPITAL STORY: Equity Bank of Kenya to Expand Microfinance Services to Uganda, Tanzania and Rwanda Backed by Investment from Helios EB

James Mwangi, CEO of Kenya-based Equity Bank, recently announced that the bank will use the proceeds from the sale of 25 percent ownership (valued at KES 11 billion or USD 175.7 million) of the bank to investment group Helios EB to expand its operations to other countries in East Africa. The bank plans to open subsidiaries in Uganda, Tanzania and Rwanda by August 2008. The bank believes this expansion will allow it to compete against the dominant players in the region: multinationals such as Barclays and Standard Chartered, as well as local Kenya Commercial Bank. Mr. Mwangi stated that he is confident that the expansion will allow the bank to double its customer base over the next five years.

by Amy Rennison -

MICROCAPITAL STORY: Grameen Foundation partners with local Microfinance Institutions in Rwanda to Relaunch Village Phone Initiative

The Grameen Foundation, a non-profit organization that tries to replicate the Grameen Bank microfinance model around the world through a global network of partner microfinance institutions, is relaunching its Village Phone initiative in Rwanda in collaboration with MTN Rwanda (a telecommunications company). The project, called Village Phone Rwanda Tel’imbere has four local microfinance institutions (MFIs) as partners. The project was initially launched in 2006, after a successful pilot scheme had run for a year.