Former clients of the defunct Micro Finance Institutions (MFI), who have for the last seven years defaulted on loan repayment, have been given up to April 30 to sort their outstanding debts, Justice minister Tharcisse Karugarama announced on Tuesday.
He was speaking at a loan recovery review meeting at his office with officials from several ministries in attendance.
In 2006, some MFIs were unable to honor withdrawal requests from their depositors, while several others suspended deposits payment following the crisis which later engulfed the entire micro-finance sector.
Most MFIs closed down and many clients who had acquired loans took advantage to default. The recovery of the money has dragged on since then.
Karugarama said government established committees charged with recovering the loaned funds, but the process has been slow.
“I am unhappy with reports from the Central Bank and the recovery committee, because they have made little or no progress at all in this endeavour,” he said.
Karugarama said government is considering drastic measures to ensure that the defaulters repay.
“This is my final call; anyone who acquired a loan from the MFIs and didn’t pay back, has up to April 30 to pay the money or we will publish their names in the newspapers, blacklist them with the Credit Reference Bureau to ensure they never acquire any loan from financial institutions, as well as inform RDB and Rwanda Natural Resources Authorities, to identify their assets for possible freezer,” Karugarama said.
Previous reports had put the figure at Rwf6 billion, but officials have been lip-tied to reveal the detail of defaulters.
“We’re not comfortable with releasing the figures since we need to revise the list and identify the bad debtors,” Karugarama said.
District vice mayors have been tasked to lead the recovery and commissions were also established at district level to support in the recovery efforts.
At the meeting, the National Bank of Rwanda vice governor, Monique Nsanzabaganwa, said only Rwf41m has been recovered (1 per cent of the loan due).
Deputy Prosecutor-General Alphonse Hitiyaremye proposed that districts should consider putting the recovery process in their performance contract, saying it would compel the leaders to own the process since they would be held accountable.