Microfinance in Rwanda targets rural financial inclusion
In a bid to boost the country’s efforts to bank the unbanked, Letshego Rwanda Limited has launched products likely to increase rural financial inclusion.
The products, which will see people easily accessing financial services in rural and peri- urban communities countrywide, include current, fixed and savings deposit taking.
“Deposit taking in Rwanda will diversify Letshego’s core operating model and provide a key step towards developing of our financial inclusion agenda, with an emphasis on the rural areas,” said Bernard Kivava, Chief Executive Officer.
The products, according to Kivava will help Letshego Rwanda Limited in diversifying its business in markets where it can align with and contribute to the Government’s agenda of financial inclusion with the government targeting 80 percent inclusion by 2017.
“In particular, Letshego will seek opportunities for further diversification of the business where there are financial inclusion requirements and a need for productive lending,” Kivava added
Letshego Rwanda Limited-LRL is one of ten subsidiaries owned byLetshego Holdings Limited headquartered in Gaborone, Botswana and is listed on Botswana Stock Exchange (BSE) since 2002.
The group currently offers consumer and micro lending services across East and Southern Africa –Botswana, Lesotho, Kenya, Mozambique, Namibia, Rwanda, South Sudan, Swaziland, Tanzania and Uganda.
The deposit taking in Rwanda becomes the Group’s second inroad in its deposit taking transformation plan, something seen to help the group penetrate Rwanda’s microfinance sector that has been urged to drip down their services to rural areas.
The move by the microfinance gives more optimism to the country’s microfinance banked on to increase rural financing but has been battling with challenges of lack of enough credit as well as capital to expand to rural areas.
Thus, with the group’s continued strong capital adequacy USD 43 million cash reserves on hand, there is optimism that the rural folks will be able to access credit to finance their household income generating projects.
Most of the microfinances, experts say, for fear of increasing operational costs that would eat up in their profit margins prefer to restrict ending and extending to unbanked populations.
“Letshego will remain committed to expanding its footprint into rural locations where today access to financial services remains limited,” said Mythri S-George – Group Head of Corporate Affairs, Letshego Holdings Limited
The group which is the second largest quoted company on the Botswana Stock exchange has market capitalization in excess of US$650 million with advances increased by 31% in the first half of this year to USD556 million compared to the same period last year.