A micro-money lending platform whereby subscribers will be able to borrow up to Rwf50,000 payable in two weeks has been launched by telecom services provider, Airtel Rwanda and Atlantis Limited, a micro-finance institution.

The service is dubbed ‘Igurize Amafaranga’.

Speaking at the launch of the service in Kigali, Phillip Onzoma, the head of Airtel Money, said there is an increasing need for financial institutions to partner with telecom companies to extend financial services to all Rwandans.

"While Rwanda has one of the highest banking penetration rates in the region, the mobile phone is increasingly becoming a trusted device for financial transactions, such as payments, transfers, card-less withdrawals and credit facilities,” he said.

Onzoma said the service will allow subscribers who do not have accounts with banks or microfinance institutions access credit at a 10 per cent facilitation cost.

The telecom and Atlantis, which was licensed by the National Bank of Rwanda as a microfinance institution last year, are pioneers of such a facility in the country.

"This product is in line with the country’s vision to grow financial inclusion and access to financial services as a way to improve the lives of Rwandans. "Igurize Amafaranga” will provide instant access to needed financial intervention and is a reliable source of credit in moments of emergency,” Onzoma added.

Raissa Muyango, the managing director of Atlantis Rwanda, said the service is convenient as one can borrow money without presenting any collateral, especially during emergencies.

To qualify for the micro-loan, one has to be an Airtel customer with active voice, Internet or airtel money services.

"The facility is a time-saving and affordable way of borrowing since people borrow similar amounts from individuals at a 20 per cent interest payable in a week (Banque Lambert),” said Dennis Kimenyi, one of the subscribers who attended the launch of the facility.

A similar initiative has been successful in other countries, especially Kenya where, Safaricom provides loans to subscribers under its Safaricom M-pesa.

The telecom recently signed a deal with regional lender, KCB to provide clients with mobile money loans of up to a tune of Ksh1 million (Rwf7.5 million).

Most Rwandans who need small credit facilities cannot get them since they do not have security or have no accounts with banks or micro-finance institutions.

Mobile payment transactions have been increasing over the past few years, according to last year’s statistics from the central bank.

The number of mobile money transactions increased from over 57.15 million in 2013 to 104.8 million transactions last year, an 83 per cent growth. This corresponded to a 109 per cent growth in the value of mobile money transactions, from Rwf303.4 million transacted using mobile money in 2013 to Rwf691.5 million last year.