The use of savings groups in the Eastern Province of Rwanda has been successful in promoting financial inclusion for female farmers, and improving their access to resources for their agribusinesses.

Despite Rwanda being below the global average in bridging the financial inclusion gap, the active participation of women in the financial structure through savings groups has helped farmers enhance their access to inputs, labour, and equipment, hence, sustaining their commerce.

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Members of the Abajeneza Cooperative, comprising 85 women, located in Nyamirama, Kayonza District, are currently awaiting another loan from a microfinance institution. This financial inclusion has helped the cooperative to grow its marketable production volumes and increase its liquidity and capital position.

Divine Niyonsaba, the cooperative’s leader, said financial inclusion has helped the cooperative grow. "We have yet to receive another loan of Rwf three million from a microfinance institution; we had finished paying off the previous loan of Rwf three million, which helped us increase our marketable surplus. The loans helped us increase our productivity from 30 to 40 tonnes of maize produce because we bought agricultural inputs, including fertilizers, on time.”

Besides that, working with financial institutions has helped Abajeneza Cooperative members boost trust and increase the inclusion of women in the financial system.

Twenty members have managed to individually apply for loans, which they had feared at first. Fear of loans, lack of collateral security, and the influence of the community have been some of the hindrances to bridging the financial inclusion gap.

The cooperative members submitted their loan request to Umutanguha Microfinance, located in Kiramuruzi, Gatsibo District, which operates with smallholder farmers.

According to Innocent Ndayambaje, the branch manager of Umutanguha Microfinance, savings groups and the use of an agri-assessment tool have boosted loan distribution to farmers.

He said, "Savings groups act as collateral security for loan approvals; the institution has more trust for members than individuals; and the agri-assessment tool has also helped in assessing what is needed to be financed and the ideal loan size, as well as monitoring the cash flow and incomes. The project has increased the number of clients served.”

To address these challenges, the World Food Program’s (WFP) Farm to Market Alliance Project (FtMA), in partnership with Cordaid Rwanda, has been helping farmers establish financial savings groups and link them with microfinance institutions for saving, security, and access to loans, enabling access to credit, increased financial stability, and targeted product development.

So far, the WFP’s project has reached 125,000 smallholder farmers across all districts; women’s financial inclusion, as of the first quarter of 2023, has seen 1,616 financial savings groups established; 72.2 per cent are connected to financial institutions; and 75 cooperatives are active in the course.

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Joyce Mugabekazi, a mother of four and a resident of the Kabarondo sector, had a tailoring business two years ago, but her husband insisted she closes the business and takes care of home chores. According to her, the influence of family members, the fear of loans, and the lack of collateral security are still some of the challenges that hinder financial inclusion for women.

On Wednesday, May 3, during a diagnostic study by Access to Finance Rwanda, findings indicated that Rwanda is still below the average rate of 4% regarding bridging the gender gap in financial inclusion.

The Deputy Governor of the Central Bank, Soraya Hakuziyaremye, said, "The gender gap in financial inclusion stands at seven per cent; we have 74 per cent of women that have access to formal financial services compared to 81 per cent of adult men, and we can note some progress as the gap has narrowed from the 11 per cent that we had in 2016, but it is still way above the global gender gap average. Globally, 78 per cent of men and 74 per cent of women have an account, which gives a gender gap of four per cent. The findings of this research hint on where we could start while solving the issue, and this cannot be done by one institution.”

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Hakuziyaremye urged various commercial and non-commercial institutions to collaborate in the effort to address the persistent gender financial gaps in order to drive efforts towards bridging the gender gap.

To address these challenges, initiatives such as the World Food Program’s Farm to Market Alliance Project (FtMA) have helped women farmers establish financial saving groups and link them with microfinance institutions for saving purposes, security, and access to loans, reaching 125,000 smallholder farmers, mainly women, in all districts.

Also, an agri-assessment tool has been enrolled in microfinance institutions to assist loan officers. "A loan officer can determine the ideal loan size for a particular farmer. The tool has helped loan officers reduce the risk of default and contributed to timely seasonal loans to farmers,” said Annabelle Victoire Umutesi, the Cordaid project manager.

According to Umutesi, the tool provides data, and based on this cash flow, financial institutions can determine the ideal loan size for a particular farmer. This has helped reduce the risk of default and contributed to timely seasonal loans for farmers.

To address these challenges, initiatives such as the World Food Program’s Farmers to Market Alliance Project (FtMA) have helped women farmers establish financial saving groups and link them with microfinance institutions for saving purposes, security, and access to loans, reaching 125,000 smallholder farmers, mainly women, in all districts.

Also, an agri-assessment tool has been enrolled in microfinance institutions to assist loan officers. "A loan officer can determine the ideal loan size for a particular farmer. The tool has helped loan officers reduce the risk of default and contributed to timely seasonal loans to farmers,” said Annabelle Victoire Umutesi, the Cordaid project manager.

According to Umutesi, the tool provides data, and based on this cash flow, financial institutions can determine the ideal loan size for a particular farmer. This has helped reduce the risk of default and contributed to timely seasonal loans for farmers.

ALSO READ: FEATURED: The gender gap in financial inclusion persists; what should be done?