Microfinance banks would foster access to credit for SMEs

Microfinance banks would foster access to credit for SMEs

Financial Institutions like Microfinance Banks are seen as vital channel through which   Small and Medium enterprises-(SMEs) mainly in rural areas can access credit to expand their businesses. Due to their nature of operation, rural SMEs which  are  mostly  household  enterprises  depending  on   meager family  capital have been finding it difficult to   woe banks to extend credit to them with the latter seeing the country’s budding sector  as risky  to lend to. While on the other hand microfinance Institutions may not have enough line of credit to   lend to the entire sector which as well as enough resources to   ensure   loan recovery as well as supporting the borrower technically to avoid defaulting. “Their service delivery   is  …

Financial constraints cripple Umwalimu Saccos loan book growth

Financial constraints cripple Umwalimu Saccos loan book growth

Despite   registering a huge profit    last year mainly  driven  by   increased loan  book as well as  dropping  Non  performing loans-NPLs,  Umwalimu  Sacco  says  lack of financial  capacity  is   hampering the growth   in its loan  book . To extend to   its clients, the country’s teachers Savings and credit cooperatives relies on the returns from the loans disbursed as well as teachers’ savings which is not enough to   satisfy the increasing demand. “The financial capacity of the institution is still   low, specifically in covering or supporting the teachers’ loan demands,” said Joseph   Museruka, the Sacco’s Managing Director This according to Museruka   is also attributed to  low interest rate that  stands  at 11 per cent which   drive   more …

Non- performing loans affecting banking sector

Non- performing loans affecting banking sector

  The banking industry is considering a recapitalisation to shore up its profitability levels, which are rattled by high operating costs and non-performing loans. The industry is struggling to register profits despite increased spending on operations over the past couple of years in addition to attracting high levels of investment. Some lenders including Kenya Commercial Bank (KCB), Equity Bank and GTbank have been forced to make loan loss provisions to cater for the loans written off their balance sheets. “Most banks are considering or have already added more capital into their operations as profits are being weighed down by high non-performing loans and high operation costs,” said Maurice Toroitich, managing director of KCB Rwanda. On…

Longer term saving mobilization to curtail high interest rates

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Mobilizing for long term savings is likely to back up commercial banks to have liquidity for a longer period at low deposit rates of which they can also lend to the private sector atlow interest rates. Francois  Kanimba, Minister of Trade and Industry says that   boosting long  term  saving  mobilization instruments  such as the  insurance  and the  pension sectors would help the  commercial  banks have long term credit that they  can lend  to   businesses. “ We are quite still very  far in terms  of  mobilizing   for  long term  savings  instruments ,  I think there is need  to improve on  these,” said Kanimba For example the pension sector which is   vital in increasing domestic long term…

Printing of new bank notes to be delayed

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The National Bank of Rwanda (BNR) has to wait longer for the firm, which was awarded currency-printing contract to deliver new banknotes. On August 21 last year, the government opened the bidding process for design and printing of new banknotes to seven European firms. According to the bidding documents from the central bank, the ultimate winners of the contract had to deliver new banknotes by the end of July this year but the delivery is yet to be made.  The reasons for the delayed delivery of the new banknotes to government by the supplier are yet to be known. The BNR is now in advanced stage of printing new notes of Rwf2000 and Rwf5000 notes…

SACCOs urged to integrate ICT, boost efficiency

SACCO

  Despite the recent growth in the performance   sheet of the savings and Credit Cooperatives –SACCOs, there is a need to integrate technology to help increase efficiency in serving their clientele. The SACCOS are seen as vital tools to drive financial inclusion especially banking the unbanked in rural areas, something that has promoted government to put   in much efforts   to boost their capacity. Accordingto Fin scopeSurvey 2013, “Use of technology    in the SACCOS is important and this will solve some of the challenges like Non Performing Loans,” said Damien Mugabo, Director General, Rwanda Cooperative Agency-RCA Mugabo says that with the recent linking of the Sacco’s to the credit Reference bureau has played a key role…

KCB to offer more mortgages

KCB to offer more mortgages

Kenya’s Commercial Bank, the largest lender by assets, plans to offer mortgage-backed securities on the local bourse to help developers raise funds to build new housing units, its chief executive said. There are less than 30,000 mortgages in Rwanda against a potential of 1 million, according to the government, and a severe shortage of houses has driven up prices. KCB, which also operates in Tanzania, Uganda, South Sudan and Burundi, has previously said it has a target of writing 1 million new mortgages, in a country where annual demand for housing outstrips supply by about 100,000 units. The bank, one of the biggest mortgage lenders in Kenya along with Housing Finance, said it was working with…

Gakenke; Residents embrace saving culture

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Residents of Gakenke sector in Gakenke district have embraced the saving culture, responding to a call by the local authorities; banks and small financial institutions operating in the area. This comes following the increase in the number of SACCOs and banks that operate in Gakenke district. Commenting on the importance of saving, Devota Mukamusoni, a resident of Rusagara cell reveals that saving has improved the social and economic standards of some residents. “I used to save my money in the house where it could be easily stolen. Today, I have an account in Umurenge SACCO which allows me to access financial services, I have achieved a lot ever since I embraced the discipline of saving,”…

Gatsibo: Residents hail Umurenge SACCO

Residents especially

Residents in Gasange and Murambi sectors in Rutsiro district have commended Umurenge SACCO, saying it’s the factor behind the implementation of Kora wigire, a national employment programme to curb down unemployment. Residents revealed this during savings week that started on October 25-31, 2014 in Rutsiro district under the theme “Save NOW for a better FUTURE”. Mukagatare Sylvie, a farmer confirmed that working with SACCO enables her to save and access loans anytime she needs more money. “Saving money on SACCO account has helped me to save from what I earn. I have access to loans whenever I need more money for other development projects,” she said. “Umurenge SACCOs reach out to members and areas that…

Rwanda to join better than cash alliance

10-30-2014Cashless

Today the Government of Rwanda has moved to accelerate its plans to transform Rwanda into a cashless economy and achieve 80 percent financial inclusion by 2017 Rwanda’s commitment to using information and communications technology (ICT) for financial services was made as it officially joined the Better than Cash Alliance, an initiative that works with governments, the development community, and the private sector to adopt the use of electronic payments. The Alliance provides support to those who commit to make the transition. These efforts aim to help people who do not have access to formal financial services and frequently have no option but to subsist almost entirely in an informal, cash-only economy. Living in a cash…