It’s only through intensified advocacy and product innovation that the micro finance institutions will deliver on the country’s economic objectives, experts have said.
According to industry experts, streamlining the sector while aligning it with the economic demands of the country will not only help the sector sustain growth but also expand its market share.
Through innovation, it is possible for the sector to financially reach the unbanked population and drive home the EDPRS II objectives, especially in the rural areas.
Balthazar Nizeyimana, a consultant and managing director at EPO Company Ltd, said that it is very imperative for stakeholders to understand the importance of advocacy in the financial industry.
“The idea of service diversification across MFIs and to the sector at large will enable the sector to work professionally and contribute more efficiently to poverty reduction in a sustainable manner,” Nizeyimana said during the opening of advocacy and communications strategy development workshop recently.
This could be a big boost for the sector that performed tremendously well last year, according to figures from National Bank of Rwanda.
Figures indicate that the sector’s total assets increased from Rwf101 billion in 2012 to Rwf128.7 last year while the capital adequacy ratio reached a record high of 33.4 percent well above the minimum regulatory requirement of 15 percent.
The micro finance sector also remains liquidity at 80.5 percent against the minimum requirement of 30 percent. Further evidence of strength was witnessed in the decline in the ratio of non-performing loans to 6.8 percent from 8.5 percent during 2012.
The good performance was mainly driven by the liquid assets and gross loans which increased by 27.2 percent and 24.2 percent, respectively according to the central bank.
Jean Marie Vianney Nzagahimana, the Association of Microfinance Institutions in Rwanda (AMIR)’s president said that it’s within the association agenda to sensitise and align its members with modern financial markets.
“One of the core mandates of AMIR is to provide advocacy services to you, our stakeholders, so that an enabling market environment is created for you to thrive. Our continued effort in advocating for favorable policies, including tax and legal policies, so that you are able to expand your financial penetration to an outreach that is inclusive across the country.”
He further called for professionalism and financial discipline amongst stakeholders so as to build the integrity of the sector.
The micro finance sector is currently comprised of about 478 SACCOs including 416 Umurenge SCCOs.
The sectors sounding performs can only be maintained through capacity building in terms of technology, constant market surveillance, and product innovation and doing what commercial banks have failed to do according Peter Rwema, the association’s head of research and development.