Caisse des Affaires Financières (CAF) Isonga Ltd, a Rwandan micro-finance institution with its head-office in Muhanga has been put under liquidation by the central bank.
Liquidation is the process of selling off all the assets of a registered entity, settling its debts, distributing any remaining funds to shareholders and closing it down as a legal entity.
According to the central bank, CAF-Isonga is in the process of being wound up with a liquidator appointed to handle the process.
Thabee Nyiraminani, the liquidator, will prepare and submit a list of depositors within 40 days to make way for them to receive refunds of their deposits.
The depositors will receive their deposits within a 60 day period from September 6, the central bank said in a statement.
The majority of the refunds will be through the Deposit Guarantee Fund (GTB) while any outstanding balances will be from the proceeds of the liquidation process.
The central bank is, however, calling on those who owed the institution money as it was all recorded under the Credit Reference Bureau and would hamper their chances of access credit in the country.
However, the bank clarified that the turnout of events does not in any way represent the soundness of the Rwandan financial sector.
Rwanda has 457 MFIs as at June 2019 with 19 of them being limited liability institutions like CAF-Isonga. A majority of MFI loans in 2019 went to support agriculture activities.
In the first half of 2018 Limited Liability MFIs made a loss of 653.3M while in January to June of 2019, they made a profit of Rwf1.1 billion.