The National Bank of Rwanda (BNR) has liquidated Urunana microfinance according to sources.
Claudine Zaninka the Executive secretary of Association of Micro Finance Institutions in Rwanda (AMIR) told Business Times that BNR is also in the process of liquidating three more microfinance institutions that have run bankrupt.
However details on how much Urunana was worth were not availed.
The central bank that plays a regulatory role for all the financial institutions in the country can call for the liquidation in case the MFIs run bankrupt.
The three microfinance institutions that face liquidation have not been mentioned by the association of microfinance institutions (AMIR) because the evaluation is on going.
According to AMIR, the umbrella body of MFIs in the country, there have been 94 member institutions in the country before the closure of Urunana.
“Previously under their respective unions, the unions would declare the non performance of MFIs and the membership would be scrapped but today they have to follow the laws that were adopted by the general assembly,” said Zaninka.
The financial institutions can also be scrapped off their membership in case they don’t abide by laws governing them like the code of conduct and internal regulations.
When the institution is in form of a cooperative, the members with shares incurs the loss and if it is a limited company, central bank will liquidate the institution.
“However, the three micro finance institutions can still survive the closure if they can put their act together by boosting their operations and profits for their members” added Zaninka.