The National Bank of Rwanda (BNR) is hosting a regional meeting to discuss ways on how to align rules and regulations that govern the microfinance industry within the East African Community (EAC) countries.
The move is part of the regional Monetary Affairs Committee mandate through which the EAC’s Central Bank Governors are tasked to enhance monetary and financial cooperation.
Speaking during the launch of the two-day meeting the Governor of BNR, Francois Kanimba, said that apart from a functioning legal system, financial development requires a functioning financial system.
“It is worthwhile to stress that the regulation of microfinance generally lies within the legal infrastructure of each country and a weak legal infrastructure can undermine financial development in a variety ways,” Kanimba said.
This means that Rwanda will have to align its MFI law and regulations with other EAC countries. The MFI law in Rwanda caters for licensing requirements, corporate governance, performance and accounting standards, accountability and transparency, deposit protection as well as liquidation mechanism.
Kanimba added that the workshop will harmonise regulatory tendencies. Participants are expected to discuss benefits and challenges with regard to harmonisation of regulation of microfinance, access to finance, microfinance policy, regulation and supervision, similarities and differences.
“The roadmap resulting from the discussions will make it possible for us to provide a strong foundation for a more harmonised regulation of the microfinance sector in the EAC countries,” Kanimba said.
The meeting that started yesterday brought together representatives from the EAC central banks, regulators of savings and credit co-operatives (SACCOs) as well as consulting firms.