Umurenge SACCO records high increase in deposits
Rwanda has been working around the clock to develop the culture of saving among its population with more emphasis applied to rural areas.
Back then most people kept their money by traditional means such as digging a hole and burying their money, which proved to be dangerous because many were losing their money due to poor keeping.
The government of Rwanda started to think of establishing Umurenge SACCO across all districts in 2008, after carrying out a study that showed that 52% of Rwandans had no access to formal financial institutions.
“There is no doubt Umurenge SACCOs is the only way to achieve the political commitment of increasing financial inclusion from all to 80 percent by 2017,” said Minister Trade and Industry, Francois Kanimba.
This would in effect, encourage local citizens to break the stigma of fearing financial institutions. Local citizens would thereafter be able to save, access loans and credit for different business activities, thus allowing them to invest and graduate from chronic poverty.
Since the introduction of Umurenge SACCO, different government and non government departments especially working in the areas of decentralization and local governance have made efforts to mobilize Rwandans towards this program.
The Ministry of Local government and the Rwanda Cooperative Agency (RCA) have been at the helm of this drive.
According to figures released by the National Bank of Rwanda in August 2013 Umurenge SACCO has so far recorded a 31.5% increase in deposits reaching Frw 37 billion by June 2013 from Frw 28.2 billion in December 2012.
The rise in the number of deposits is attributed to efforts by government to get more Rwandans especially those in rural areas to be financially included.
The Umurenge SACCOs were established among others things to boost rural savings and help the rural poor acquire loans from their savings.
Loans granted by Umurenge SACCOs grew by 17.9 per cent to Frw 16.4 billion from Frw13.9 billion but the non-performing loan ratio deteriorated to 6.1 % in June from 5.3% in December.
Umurenge SACCO is a financial institution under the cooperative form, which operates in the financial system; it is a legal entity in which individuals save their money and can get loans in order to invest in various activities such as Agriculture, Trade and provision of basic needs among others.
Its fundamental objective is to maximize the benefits which members can obtain from their transactions with the cooperatives.
Umurenge SACCO is also a government’s initiative elaborated in the Vision 2020 development agenda that aims to increase access of financial services to citizens.
Currently there are 478 SACCOs 418 of which are Umurenge SACCOs.