The Association of Microfinance Institutions in Rwanda (AMIR), has called on Microfinance Institutions (MFIs), to conduct their business in a transparent way and work diligently to mitigate business risks.
Transparency is part of the wider corporate governance requirements that should characterize MFIs.
In the past, a number of MFIs failed to carry out risk assessment, and ended up bankrupt, leading to loss of savings among customers.
Rwandans lost money in 2006 when some poorly managed microfinance institutions were closed down, by the Central Bank.
Therefore, in order to avoid a situation where microfinance institutions exploit clients with exorbitant interest rates and misleading products, it is imperative for the financial institutions to be transparent, reliable and to provide quality services.
With AMIR calling for a new system, which involves transparent pricing whereby microfinance institutions will be required to declare their interest rate, the sector will restore confidence among their clients.
Financial institutions are among the key players in the growth of the economy, as they provide credit for small and medium enterprises.