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.