There are 9,597 cooperatives in Rwanda with share capital of more than Rwf45 billion. All the cooperatives count over five million members (comprising over 2.69 million men, and over 2.14 million women), according to information from Rwanda Cooperative Agency (RCA) – a public institution in charge of promoting and regulating the cooperative organisations sector in Rwanda. They are engaged in various economic activities including agriculture, livestock, commerce, service, transport, handcraft, transformation (processing), mining, fishing, and housing. They also include Savings and Credit Cooperatives (SACCOS). In an exclusive interview with The New Times’ Emmanuel Ntirenganya, RCA Director General, Prof. Jean-Bosco Harelimana elaborated on how cooperatives have been critical in improving the welfare of Rwandans, including the role SACCOs played in boosting financial inclusion with over Rwf350 billion disbursed in loans. Excerpts: Briefly, elaborate on the rationale behind cooperative policy in Rwanda Operating in cooperatives [in Rwanda] started in 1949, when we were still under colonialism. There was one cooperative then which brought together Rwandans working in mining sector that was then controlled by the colonialist. Basically the Rwandans were brought together not for their own interest but for the interest of the colonisers. That enabled them get more produce in a short time thanks to people working together. After the 1994 genocide against Tutsi, Government realized that the sector needed streamlining to make the cooperatives a special purpose vehicle that benefits Rwandans by bringing them together to work together. Socially, the cooperatives were seen as a tool to foster social cohesion especially as we were transitioning from a society that was torn apart [by the genocide]. Therefore, there was need for many strategies to make Rwandans live as one family. The commercial complex built by the Musanze motorcyclists cooperative. In 2009, RCA was established, following a deliberate campaign that aimed at encouraging Rwandans to work together so we started as an organization that would coordinate this. Cooperatives at the time engaged in tea, rice growing, construction, trading and transport and had proven to be profitable. How have cooperatives evolved over time? We carried out sensitisation and promotion programme in each cell, sector and district to encourage people to join cooperatives. As a result, there was significant and gradual increase of Rwandans embracing cooperatives and there was practical evidence that they stood more to benefit within than out of cooperatives. There were about 129 cooperatives at that time [in 1994], with less than 200,000 members. As of now, there are 9,536 counting over 5.28 million members. The major increase in membership reflects the growing commitment and how this national initiative was impacting on socio-economic of Rwandans. Currently, we have about Rwf67 billion savings in SACCOs, and Rwf15 billion saved by ordinary cooperatives. Loans that have been given to Rwandans through SACCOs total to over Rwf350 billion. If such savings were mobilised from Rwandans, and they were used to provide loans to members, it is an indicator of economic growth both for the general citizen and cooperative member. About 25 years have elapsed since the liberation of Rwanda, after the genocide against the Tutsi. What fruits has liberation borne for economic development of Rwandans through working in cooperatives? We are happy that over 90 percent of Rwandans are accessing financial services through cooperatives, which was greatly boosted by the cooperative movement. It is gratifying that tea farmers in Rwanda benefit a lot from working in cooperatives. We are happy that coffee, rice farmers have shares in agro-processing factories. They have suddenly become industrialists yet they were ordinary farmers. We are proud that cities including Kigali have buildings many of them built or acquired by cooperatives. Working together has enabled the cooperative members from the countryside to own houses in Kigali, which was a distant dream. We are glad that motorcycle taxi operators are working together, getting benefits at individual level, but also their cooperatives are progressing on a daily basis. Our cooperatives have simply become the engine of our national economy, which is a great thing. What impact are cooperatives having on the lives of members, and the country’s economy? For cooperative members, health insurance (Mutuelle de Santé) is no longer a concern, because the cooperative makes timely contributions for them. This means that a member who falls sick gets timely treatment. Cooperatives brought together people so that they join efforts to be able to achieve what they could not if each worked alone. For instance, businesspeople came together to set up modern commercial complexes and were able to move from small houses in poor conditions to decent workplace. Others have actually made more money in the process through renting out the remaining space; leave alone the increased number of walk-in customers due to more visibility. Before Umurenge SACCO was established, the rate of financial inclusion among Rwandans was at 21 percent in 2008. But now, with each of Rwanda’s 416 sectors having Umurenge SACCO, it has grown to about 90 per cent. SACCOs have, since they started lending in 2010 until May 30, 2019, provided more than Rwf350 billion loans to their clients, which helped them to run various profitable businesses. Such a move to enable people access financial services is a big contribution to Rwandan economy because the multiplier effect is very big. RCA Director General, Prof. Jean-Bosco Harelimana. For instance, COPRORIZ Ntende (for rice farmers in Gatsibo District), and COOPTHE Mulindi (for tea farmers in Gicumbi District) are cooperatives whose members get income every month, and they are even hopeful to get pension. Working in cooperatives fostered social cohesion, and offered a great support to rapid economic transformation, especially in rural areas, and development of businesses in cities. According to figures from RCA, Umurenge-SACCOs granted more than Rwf648 million loans to local leaders, but, only some Rwf220 million was duly repaid by December 2018. What is the progress on recovering such overdue loans? Overall, non-performing loans in SACCOs have not exceeded 11.2 per cent to date. Of the Rwf628 million that SACCOs had lent to local leaders; over 96 per cent of the money [about Rwf602 billion] has been recovered thus far. For the remaining part, which is actually small compared to the total owed money, we are following up and we will recover it soon. A taskforce consisting RCA, National Bank of Rwanda, Rwanda Investigation Bureau, Prosecution, Ministry of Justice, Ministry of Trade and Industry, and the Ministry of Finance and Economic Planning was set up to help recover the loans which were not paid according to agreed terms. In addition, the team got back Rwf2.8 billion of Rwf5 billion overdue loans that had been granted to other citizens. How far is the automation of the SACCOs and what contribution will it bring once completed? When they were starting, SACCOs did not wait for advanced technology to give loans to their members. Today, because SACCOs have developed, as their regulator, we realized that it was necessary that they form a Cooperative Bank. But for it to be created, they must automate all their services. Currently, there is a team from the Ministry of Finance and another one from Rwanda Information Society Authority (RISA) which are working on an in-house development of a software to start computerising or automating SACCOs, something we hope will be completed soon. The automation is expected to be done by 2020, if everything goes as planned. With that technology, a member from Rusizi [district] will be able to access financial services while they are in Rubavu District, for instance, the interoperability between SACCOs will be easily done, but also it will facilitate us to monitor day to day operations in SACCOs. Setting up a cooperative bank has been mooted for long as one of the solution to streamline services of SACCOs. What’s the progress on its establishment? A Cooperative Bank will play two roles: to manage all SACCOs which will become its shareholders; and facilitate the refinancing – liquidity management – such that if there are a lot of funds in Kigali but they are not being used, the bank can take them to another SACCO where there are many clients. It will also manage the transactions. Its establishment will follow the automation of SACCOs. What future plans and strategies do you have to ensure that cooperatives become a sustainable driver for Rwanda’s development and improved livelihoods of Rwandans? First, we have a capacity building programme for them, which consist of training staff. Second, we want to enable them use ICT and modern systems. We have also to help them have a Cooperative Bank so that they work professionally like other banks. Another intervention is monitoring, inspection and supervision as well as supporting them in control measures. All these interventions will help them work much better.