Over the past 20 years, LOLC Unguka Finance has significantly contributed to Rwanda's socio-economic development as the nation recovered from the 1994 Genocide against the Tutsi. LOLC Unguka Finance commenced its operations in Rwanda in 2005, following an initial investment of over Rwf 300 million from 214 individuals. “Unguka was founded two decades ago, kicking off operations in 2005, after being granted a temporary license to operate as a microfinance institution in August 2005 of that year.” At the time, Rwanda was still recovering from the Genocide, and people were thinking about how to support the economy. Ten young professionals, still at university, decided to contribute by founding a microfinance institution. Several ideas were proposed, but eventually they agreed on setting up a microfinance institution,” Chief Executive Officer of LOLC Unguka Finance, Justin Kagishiro, narrated. However, despite the idea to set up a microfinance institution, Kagishiro explained, they had no capital. “Starting such an institution required a minimum of Rwf100 million. So, they reached out to friends and relatives and successfully gathered 214 shareholders who together raised Rwf321 million,” he explained. The average contribution per person was approximately Rwf1 million, although some individuals contributed more. “In August 2005, we received a temporary license from the National Bank of Rwanda to operate, with two branches: one in Nyabugogo and the other in Remera. The head office was initially located in Nyabugogo,” he said. In 2006, Unguka received a permanent license and opened two more branches in Rubavu and Musanze districts. The headquarters also moved to Remera that year. “Our initial capital of Rwf321 million had been subscribed but not fully paid. The board and management worked hard to recover the committed capital. Following the 2006 crisis in the microfinance sector, the Central Bank increased the minimum capital requirement from Rwf100 million to Rwf300 million to be able to operate. Fortunately, we had already met this threshold, but the board and management decided to be proactive and started raising more capital in anticipation of future increases,” he said. Kagishiro said a campaign was launched among shareholders, customers, and staff. By 2008, 556 people had joined and raised to Rwf1.7 billion, about five times the original capital. “By 2011, the institution was performing well, and we were granted a license to operate as a microfinance bank. In 2012, we brought in a strategic investor from Luxembourg—RIF II, managed by Incofin, a Belgian firm, which invested Rwf1.5 billion, raising the capital to Rwf3.2 billion.” Before RIF II joined, the original 556 founders formed an umbrella group called Unguka Investment Group, which still owns 10 per cent of the shares. In 2015, another strategic investor, Progression East Africa Microfinance Equity Fund (PEAMEF) from Mauritius, joined, investing Rwf1.6 billion, raising the capital to Rwf5.1 billion. “These two investors remained until 2023, when they exited and were replaced by LOLC Mauritius Holdings Limited, which acquired a 90 per cent stake in the company,” he said. LOLC Mauritius Holdings Limited is wholly owned by Sri Lanka’s financial services giant, LOLC Holdings Plc, which commands operations in 26 countries across Africa, Asia, and Australia. Over 20,000 active customers,+Rwf3 billion in new loans disbursed per month “Currently, we operate through 16 branches with around 200 staff and serve approximately +20,000 active customers. As a financial institution, our main role is financial intermediation—we take deposits and provide loans. Most people associate financial institutions with loans, but I believe our best product is our savings accounts,” he explained. He explained that financially successful people are often those with significant savings and investments. “We’re encouraging a culture of saving to support sustainable economic development. Today, we disburse between Rwf3 billion and Rwf4 billion in loans every month to support the economy,” he added. He said they also support women actively. “Many of our clients running micro-businesses are women. We have some truly inspiring stories. For example, there’s a client who came to our Remera branch in 2006 and requested a loan of Rwf300,000. When he asked for an additional Rwf50,000, it was a serious concern whether she could repay it. But we worked with him. Today, that same client can request a loan of Rwf300 million. His business has grown tremendously, and so has his asset base. These are the success stories that make us proud,” he said. He said the institution has committed to continuing to evolve, particularly through digital innovation. “We’re focused on improving our digital strategy so customers can easily access our services. We continually gather feedback and refine our products to better meet their needs. It’s an ongoing process. We must stay responsive to market demands. We’re committed to supporting national development goals.” LOLC Unguka Finance serves clients with diversified loan products such as mortgage loans, working capital loans, vehicle financing, and microloan facilities, and offers savings and fixed deposits on the liability front. The visionary executives at LOLC Unguka Finance have unequivocally promised their commitment to ensuring swift and hassle-free loan access and will deliver loans within a short time. Its diversified operations span various sectors, including manufacturing and trading, leisure, agriculture and plantations, technology, research and innovation, construction, and strategic investments. The growth was driven by more loans being given out and a better-quality loan portfolio (borrowers repaying more reliably, fewer defaults). The net loan book, which is the total amount of loans the institution has given out, minus any provisions for losses, grew from Rwf20.173 billion in December 2023 to Rwf27.441 billion in December 2024, which is a 36 per cent increase. The NPL ratio, or percentage of loans that are in default or not being repaid as scheduled, declined from 1.63 per cent in 2023 to 0.99 per cent in 2024. This indicates better loan repayment, stronger loan recovery, and improved risk management. Total deposits increased by 28 per cent year-on-year, from 2023 to 2024. More customers are depositing money with the institution, indicating growing trust and effective efforts to mobilise new deposits. Total assets increased by 15 per cent year-on-year for the same period. This is mainly due to the increase in loans and advances (loan portfolio expansion) and the rise in customer deposits, which strengthens the balance sheet. “This reflects effective management, portfolio quality, and trust from customers.” Celebrating Liberation Day Kagishiro, who has been with Unguka since 2005, added that as Rwanda marks the 31st anniversary of liberation, on July 4, people reflect not only on the struggles and sacrifices made for freedom but also on the journey of economic empowerment for all Rwandans. “Just look around what’s happening in Rwanda, it is remarkable. We’re proud to contribute to that journey, helping liberate people from poverty. There's still a long way to go, but if Rwanda has come this far from where it was, what can truly be called impossible? This country was once almost non-existent. Now it ranks among the top performers in many metrics. As a financial institution, we’re proud to operate in such an enabling environment, and we’re committed to continuing our contribution to this national journey,” he noted.
