MFI registers Frw1.2b capital increment

Unguka SA a Micro Finance Institution (MFI) has registered an increase on its capital reserves of Frw1.2b in a period of two year.

Unguka SA a Micro Finance Institution (MFI) has registered an increase on its capital reserves of Frw1.2b in a period of two year.

The MFI was licensed by the central bank with capital equivalent to Frw321,100m in 2005 but now has Frw1.5m as its capital.

Gérard Rutari the board president said that in 2005, when the institution started to operate, they got 1819 clients over 700 projections for the year.

He attributed this increase to low levels of delinquency of their clients saying that credit repayment was at 97 percent in 2007.

Increasing levels of savings and empowering clients who are taught how to make and implement projects in the country also partly accounted for this growth in 2007.
“Since 2005 savings have increased from Frw92m to over Frw379m. In 2006 the targets for the savings, credits and the number of clients had been reached to over 77 percent,” Rutari said.

However he said that their performance was affected by the closure of some MFIs in 2006, adding that clients lost confidence in MFIs a move that made them not meet some targets.
On June 16, National Bank of Rwanda (BNR) announced the immediate closure of 8 microfinance institutions citing gross mismanagement, significant losses incurred because of very poor credit management practices.

These MFIs had also failed to meet minimal conditions for licensing, loss of customer confidence resulting in massive withdrawals of deposits and failure to attract any more new deposits.
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