MFIs eyes children savings to boost savings culture

MFIs eyes children savings to boost savings culture

There is optimism that   promoting children savings would spur a culture of savings thus  translating into financial inclusion, a  milestone the country is  looking at  to  leapfrog its economy  in  middle income  status.

This means that encouraging children to join formal banking systems will help the children to grow with the culture of savings, something that gives a stronger financial backbone the economy.

“When  we are teaching our  children  discipline , we should always include the financial  discipline  which will help  them grow into  responsible  citizens,” said Rita Ngarambe, Executive Secretary  of Association of Microfinance institutions  in Rwanda-AMIR

Encouraging savings at a tender age on the other hand helps the financial institutions to have enough liquidity to   lend to the borrowers, of which its interests are   the   profits of the institutions to continue operating.

Moreover, most financial institutions   mainly Microfinance Institutions and Savings and credit cooperatives have been struggling to   keep afloat its operations as their profits are always low due to lack of enough   liquidity to lend out to borrowers.

Thus AMIR, the umbrella organization for Micro finance institutions in Rwanda   is wooing MFIs to encourage children account opening to raise more savings from children.

“We started calling on all our members to sensitize schools and parents to   allow children open accounts and start saving,” she said

To foster the initiative, the association has helped in setting up 514 savings clubs in schools across the country as well as establishing as well as wooing the education ministry to add basic entrepreneurial skills in the school curriculum mainly in   primary schools.

With the partnership between the Ministry of Education and Department for International Development (DFID), children savings will be rolled out in various schools in the country.

“we want  all schools to have the   savings  clubs to  encourage children to  save   for their future, which means they can even pay for their  tuition  fees in future as well,” said  Ngarambe.

This will mean that teachers as well as district education officials will be brought on board to promote the initiative, something likely to see the MFIs getting more amounts as well as savings to increase their lending.

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