Govt to control MFI donor funds

The future of donor funded microfinance institutions hangs in balance as their closure is eminent.

Government wants all donor funds to be managed by the Treasury.

“There should be one fund for supporting all MFI’s in the country. We have found out that those that are locally funded, cannot compete favourably with donor funded MFI,” said Francois Kanimba, Governor National Bank of Rwanda (BNR).

He was addressing representatives of MFI, and other government bodies including Ministry of Commerce (MINICOM), and members of the local administration at Nyarugenge District office recently. 

His remarks came after comments a representation of Vision Finance, one of biggest donor funded MFI’s in the country said 90 per cent of its survival depends on donations. Government recently voted to have donor funds as budget support for better accountability and effectiveness.

The central bank set January next year as the time all MFI’s are expected to have generated a minimum equity of Frw300 million. The minimum share capital was recently increased from Frw100 million. Kanimba said this was in the bid to strengthen the operation of MFI’s in the country.

He also called on the local authorities to participate in insuring effectiveness in operation of MFI’s in the country. 

On her part Mayor of Kigali, Aisa Kirabo Kacyira expressed dissatisfaction over the operations of MFIs in the country. She said managing these institutions should be primarily based on ability and not mutual understanding as the case has always been.

“Every district should have a forum uniting all MFI’s and come up with internal regulations,” Kirabo said. 

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