The recent health growth witnessed by Umurenge Savings and Credit Cooperatives (SACCOs) will enhance access to finance through cheaper loans to rural agro based businesses and Small and Medium Enterprises (SMEs) and boost their earnings, according to a top official.
The Minister of Trade and Industry, Francois Kanimba, told Business Times that the optimism in Umurenge SACCOs performance would translate into rural financial inclusion and also increase credit needed to support rural based micro businesses and projects.
“More people turned up to save with the programme and have opened up savings accounts which shows that government’s efforts are indeed paying off,” he said in an interview last week.
The Minister noted that as result, Umurenge SACCO triggered increased credit extension to rural based agro businesses to the tune of Rwf5.2b by November 2011 from Rwf818m in 2010.
Through SACCOs, rural communities surely do have a system that will improve their livelihood, he added.
The programme was established to boost rural savings and act as a channel for rural Rwandans to acquire loans to boost their incomes.
Gilbert Habyarimana, the Deputy Director General Rwanda Cooperative Alliance (RCA) attributes the performance to intensive capacity building of Umurenge SACCO that saw an increase in licensed SACCOs, loan management, business plans and procedures manual.
“We have invested much into ensuring that these SACCOs turn into credible financial cooperatives which are able to help people save and also acquire credit to develop,” he said.
A total of 139 cooperatives under Umurenge SACCO were awarded full licenses by the central bank to operate after they successfully submitted business plan designs, with 32 SACCOs said to have completed building offices mainly through contributions from their members.
Habyarimana is hopeful that this year will see many SACCOs translating into bigger financial institutions which should boost government efforts to meet its 2017 target of having more than 80 per cent rural people banked by financial institutions.
“We are continuing with technical management of SACCOs and increase our efforts in sensitising people to save, and mainly the youth and women,” he added.
According to Fin scope report 2008, majority of the rural unbanked are women and youth who are engaged in agriculture. The findings call for more pro youth and women financial programmes.
Vianney Nzagahimana, Umwalimu SAACOs Board Chairman said that SACCOs need to intensify the campaign aimed at changing the mindset of people in terms of savings if they are to increase the capital needed to disburse in terms of loans.