Members of the Swedish Parliament Committee on Finance have lauded Rwanda’s efforts in ensuring access to financial services for the rural poor to eradicate poverty.
The remarks were made during a visit to Access to Finance Rwanda (AFR) projects located in Gicumbi District, Kaniga sector, last week.
The committee members, who were on a familiarisation tour of the country also visited Swedish development cooperation projects in Rwanda, according to Maria Håkansson, chargée d’affaires at the Swedish embassy in Kigali.
Sweden, through the Swedish International Development Agency (SIDA) provides funding to Access to Finance Rwanda, to support poor people and SMEs especially women through access to financial services.
The partnership with Sweden targets to support AFR phase2 (2016-2020) with $2.95 million to develop Umurenge SACCOs, support access to finance by small holder farmers engaged in maize, coffee and tea, dairy and Irish potatoes as well as promoting insurance and informal sector pension scheme.
Hansson said the parliament committee expressed satisfaction with the projects’ implementation that will be boosted by a recent grant from their country.
A project to build capacity in SACCOs was one of those visited.
It is implemented through partnership with Access to Finance.
It disburses payments to smallholder tea farmers through using digital mobile financial services in partnership with TIGO and Wood Foundation, the owner of Mulindi tea factory.
The project targets to serve 11,000 tea farmers and as of December 2015, it had reached 4,504 new clients.
Of this, 1,948 are paid salaries through mobile financial services in 3 SACCOs of COOPEC Ishema Mulindi, Mulindi Tea Growers in Gicumbi district and Shagasha Tea SACCOs in Rusizi District, according to Roselyne Uwamahoro, AFR programme manager.
Also visited was ‘Village Savings and lending groups’ which target the poorest and most financially excluded people.
Theophile Twahirwa, the director of programme quality at CARE International which is implementing the project in partnership with AFR, said between 25-30 members form groups and start saving to provide loans from saved amount among themselves at 5 percent interest rate each month.
“They meet to provide their shares from 1 share up to 4 shares each person per week. We then provide them financial literacy. They provide loans to members and each uses the money depending on their preferences. Finally we link them to micro finance institutions to give them loans to expand their businesses,” he said.
The micro finance provides the loan to the whole group so as to avoid asking for collateral then the group distributes the loan among members and pays back the loan as a group, Twahirwa added.
The system, he says, since 2013 is operating in 17 districts with over 6,900 groups with 172,000 people of which 138,890 are women and so far cumulative savings amongst the group have amounted to $3.6 million.
Total outstanding loans are currently at $3.1 million.
Beneficiaries speak out
Monica Mujawamariya, the secretary of ‘Twizerane saving group’ said they started their group targeting livestock business with a share of Rwf200 each per week and accumulated about Rwf1 million in first cycle to buy 11 goats and 19 sheep.
“In the second cycle we got Rwf1.3 million. The share is Rwf300 each person per week and each member has bought a mattress, two got cows and with the third cycle we will pay Rwf500 each per week. We are now linked to financial institution ‘Vision Finance’, that gave us a Rwf400, 000 loan to expand livestock business, fruits and cereals trade,” she said.
Emmanuel Mbarushimana, a tea farmer from Byumba sector using mobile financial services said :“I used to walk a distance of 15km to get my salary at the factory and could spend a lot of time on long queues. Our tea farms remained unexploited. But Access to finance and the factory helped us to join SACCO COOPEC Ishema partnering with Tigo to get our salary through Tigo Agent.”
“After reducing time wasted on travelling we were able to plant more 1,400 hectares of tea plants and with enough time to treat trees, one tea tree can now produce 2kg from 1kg per year.”
Tea farmers also share regular SMS updates of market prices, weather information and advisory services related to agriculture through mobile phones.