Microfinance institutions countrywide are doing well in the efforts towards achieving Economic Development and Poverty Reduction Strategies (EDPRS), a minister said.
EDPRS is Rwanda’s comprehensive development agenda targeting to ensure progress across both the productive and social sectors.
James Musoni, the finance and economic planning minister said microfinance institutions are closer and give loans easily to the local people to finance their investments.
And as so, “people generate income from these loans, thus narrowing the income gap, which reduces on the levels of poverty,” he said.
“Microfinance institutions also promote savings and mobilise finance in the country.”
Musoni said because government is pleased with microfinance institutions, they will be helped to grow.
The minister said government through the National Bank will initiate three types of funding systems to facilitate developmental plans of these financing institutions.
He noted that microfinance institutions, though they play a major role in development are still constrained; citing some limits as difficulties in acquiring loans.
The funding systems highlighted include credit lines for accessing quick loans with minimum interest rates, guarantee funding to a give allowance to institutes that do not have securities for acquiring loans, and capacity building for financing the training towards human capacity development.
However, “only microfinance institutions registered with the National Bank of Rwanda are entitled to these incentives,” Musoni said.
Against that background, Françoise Kanimba, governor of National Bank of Rwanda said the National Bank will seek for more incentives for microfinance institutions to trigger further development in the country.
Some inactive and incompetent micro-finance institutions were forced to close down last year.
The Treasury has released Frw1.5 billion to compensate depositors, Kanimba said.